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Asian equities ticked higher on Tuesday on optimism that the US and China may be able to reach a trade deal before a March 1 deadline.  

Japan’s Nikkei jumped close to 500 points or 3 percent, as the improved risk appetite lifted USD/JPY above 110.00. Stocks in Australia and New Zealand rose 0.32 percent and 0.90 percent, respectively.  China’s Shanghai Composite index also added 0.3 percent as the S&P 500 futures gained 0.5 percent.  

In FX markets, the US dollar remained on the offensive, as concerns of a slowdown in Europe and Oceania has pushed up yield differentials in favor of the greenback.  

US and Chinese officials expressed hopes on Monday that a new round of talks would bring two sides closer to easing out trade tensions.  

It is worth noting that the 30-day truce period is set to end on March 1, after which the US is scheduled to hike tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent.

The risk assets, therefore, could take a beating if the two sides are unable to reach a trade deal before March 1.