The Bank of Japan's Tankan index for big manufacturers' sentiment fell to over six-year low of 0 in the fourth quarter of 2019 from 5 in the prior period and missing market expectations of 2. Sentiment deteriorated among enterprises producing: business oriented machinery (0 vs 16 in Q3), motor vehicles (-11 vs 2), iron & steel (-2 vs 7), production machinery (4 vs 11), processed metals (-14 vs -8), shipbuilding & heavy machinery (-7 vs 0), textiles (3 vs 9), and chemicals (2 vs 5). In contrast, sentiment rose among firms producing pulp & paper (11 vs 0), petroleum & coal products (-12 vs -18), nonferrous metals (-15 vs -18), and food & beverages (10 vs 7). Meanwhile, big firms plan to raise their capital spending by 6.8 percent, above estimates of 6 percent. Among non-manufacturing large firms, sentiment eased to 20 from 21 in Q3, but beating forecasts of 16.

The Chinese yuan rose 0.28 percent to 6,9611 per dollar in offshore market around 11:30 AM beijing time following news a phase one trade agreement has been reached with the US, suspending the new round of tariffs and reducing existing ones. China also has agreed to buy $50 billion in US agricultural products in 2020 and to increase intellectual property protection.

The unemployment rate in Malaysia slipped to 3.2 percent in October 2019 from 3.3 percent in the same month the previous year. The number of unemployed edged down 0.2 percent from a year earlier to 512.1 thousand, while employment went up 2.3 percent to 15.27 million. Also, the labor force rose 2.1 percent to 15.78 million. On a seasonally adjusted basis, the jobless rate also inched lower to 3.2 percent in October from 3.2 percent in September.

Oil prices increased on Friday morning, as the US and China moved closer to a trade deal. At around 9:35 AM EST, Brent futures rose 47 cents or 0.73 percent to US$64.67 per barrel, while US West Texas Intermediate (WTI) crude rose 35 cents or 0.59 percent to US$59.53 a barrel.

Stocks in Asia jumped in Friday morning trade following news that said the US and China may have agreed to a phase one trade deal in principle. The benchmark Nikkei 225 index surged 500 points or 2.14 percent to 23,925, at around 09:35 AM Japan time, after standing at a high of 23,965 earlier. Also, South Korea's KOSPI gained 27 points or 1.27 percent to 2,164, at around 09:37 AM Korea time, after reaching a high of 2,168 before. In addition, Hong Kong's Hang Seng index soared 435 points or 1.61 percent to 27,429, at around 10:09 AM Hong Kong time, after hitting a high of 27,536 earlier. Shanghai composite was 32.2 points higher or 1.11 percent to 2,948, at around 10:08 AM China standard time.

The Australian stock market advanced on Friday morning after President Trump suggested a trade deal is near completion and Bloomberg reported that negotiators have the terms of a phase-one deal pending approval. At around 11:18 AM Australian Eastern Daylight Time, the benchmark S&P/ASX 200 was 25.5 points higher or 0.38 percent to 6,734, after touching a high of 6,751 earlier. The broader All Ordinaries Index also gained 29.3 points or 0.43 percent to 6,840, after reaching a high of 6,853 before.

The BusinessNZ Performance of Manufacturing Index in New Zealand declined to 51.4 in December 2019 from 52.6 in the previous month. Three of the five components stood in contraction zone, while one lost steam and one gained some. New orders declined to 54.5 from 55.6, whereas production dropped to 49.6 from 52.4. Employment (49.2 vs 50.0) and finished stocks (48.6 vs 48.4) also contacted. Only deliveries (52.8 from 51.3) booked a better performance against November. “Overall, our take is that NZ manufacturing is still running a bit below average, but caution is mixing with some hints of improvement. If October’s big lift in the PMI suggested the worst of NZ’s economic slowdown was behind us, November’s consolidation suggests any acceleration is not going to be in a straight line,” said BNZ Senior Economist, Doug Steel.

Wall Street extended gains on Thursday with the 3 major stock indexes hitting new record highs, as President Trump suggested a trade deal is near completion and Bloomberg reported that negotiators have the terms of a phase-one deal pending approval. Earlier on Thursday, President Trump tweeted “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”, nudging stocks higher across the board. The WSJ reported that US negotiators offer to cut existing tariff rates by up to 50% on $360 billion of Chinese imports and also offered to cancel the new tariffs set to take effect December 15. On the corporate side, Facebook shares dropped nearly 3% over antitrust concerns. The Dow Jones went up 221 points or 0.8% to 28132. The S&P 500 rose 27 points or 0.9% to 3169. The Nasdaq gained 63 points or 0.7% to 8717.

Government bond yields across Europe climbed on Thursday, as investors turned to riskier assets after ECB President Christine Lagarde said at a press conference that the ECB strategic review could allow more tools used to stimulate growth and push inflation despite the optimism that the European economy is facing fewer risks. In the meantime, the new head of the ECB kept her predecessor Mario Draghi monetary policy guidance on hold as the review is expected to be completed only by the end of 2020. Sentiment was also boosted by expectations that US tariffs set to hit Chinese imports from Sunday will not take effect. German Bund yields rose to a one-month high of -0.27% and Britain's 10-year gilt yield went up to 0.823%, also its highest in four-weeks.