Asian shares rebounded on Tuesday after U.S. President Donald Trump provided assurance that the U.S.-China trade pact was "fully intact", following confusing statements from the White House earlier over the fate of the deal.
MSCI's broadest index of Asia Pacific shares outside of Japan rose 0.6% to 516.6 points after earlier going as low as 509.9. Chinese shares regained lost ground too, with the blue-chip index last up 0.3%.
Risk sentiment had taken a knock early in the Asian day after White House trade adviser Peter Navarro said the trade deal with China was "over", linking the breakdown in part to Washington's anger over Beijing not sounding the alarm earlier about the coronavirus outbreak.
The comment caused a kneejerk selloff in equities markets, although sentiment turned around quickly after a statement from Navarro that his comment had been taken out of context.
Trump also soothed nerves when he tweeted: "China trade deal is fully intact. Hopefully they will continue to live up to the terms of the agreement."
In response, shares staged a rally, the dollar climbed and safe-haven gold sold off.
"The saving grace for markets is liquidity, which is in abundance and will offer a backstop as the bulls and bears stage a tussle and cause market volatility," said Vasu Menon, Singapore-based senior investment strategist at OCBC Bank Wealth Management.
Menon expects U.S.-China tensions to escalate in the run-up to the U.S. elections.
"So expect markets to be very bumpy in second half of this year because of the double whammy from COVID-19 and U.S.-China tensions."
Hong Kong's Hang Seng rose about 1%, South Korea's KOSPI index added 0.3% while Japan's Nikkei jumped 0.8%.
Asian stocks have rallied hard since hitting a low in March amid worries about the jolt to the global economy from the coronavirus-driven shutdowns.
The gains have been driven by hefty central bank stimulus around the globe and gradual easing of restrictions, although worries about a second wave kept investors jittery.
Beijing on Monday reported its second straight day of record COVID-19 infections, while new cases and hospitalisations in record numbers swept through more U.S. states.
New infections spiked in Latin America, Brazil in particular, while New York City, the epicentre of the U.S. outbreak, eased restrictions after 100 days of lockdown.
On Wall Street overnight, the Dow rose 0.59%, the S&P 500 gained 0.65% and the tech-heavy Nasdaq added 1.11% to set a record closing high.
In currencies, the safe-haven yen slipped against the dollar to 107.19, while the euro was a shade higher at $1.1266.
The risk sensitive Australian dollar was up 0.1% at $0.6913. Its kiwi counterpart was a tad weaker at $0.6472.
In commodities, U.S. crude fell 0.6%, or 23 cents, to $40.50 a barrel, while Brent was down 13 cents at $42.95.
As investors piled on equities, spot gold was off 0.2% at $1,750.5 an ounce.
