By Tomo Uetake

TOKYO (Reuters) – Asian shares caught the tail of a Wall Street rally on Friday, helped by China’s better-than-expected export figures but fresh concerns about Sino-U.S. trade ties are likely to limit gains in the region.

Weighing on risk appetite was a report from Bloomberg that Washington is delaying a decision about licenses for U.S. firms to restart trade with Huawei Technologies. That sent U.S. stock futures down as much as 0.6% in early Asian trade. They were last quoted 0.4% lower on the day.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2% but was on track to lose 2.3% for the week.

Japan’s average advanced 0.6%, while Australian stocks stood flat and South Korean stocks gained 1.0%.

On Wall Street, the S&P 500 registered its largest one-day percentage gain in about two months on Thursday, with the and the Nasdaq also climbing more than 1%.

However, that optimism was dented by the Bloomberg report, which has reinforced concerns the deterioration in U.S.-China relations will place additional strain on an already fragile global economy.

“The news about Huawei triggered the rise in the yen,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo. “This is a reminder that the U.S.-China trade dispute remains a risk, and this risk is not receding.”

The yen strengthened as much as 0.4% against the dollar to 105.70 yen on a fresh worries triggered by a Bloomberg report.

U.S. data pointed to a robust labor market as the number of Americans filing applications for unemployment benefits unexpectedly fell last week, allaying some worries about a recession and helping Treasury yields rise.

Benchmark 10-year Treasury yields closed 2.4 basis points higher at 1.715% after hitting 1.595% on Wednesday, which was their lowest level since October 2016.

The was stable versus the dollar in early trade but could be closely watched as traders assess the latest developments in the rapidly escalating trade war between the United States and China.

“The U.S.-China trade war is very serious. My hope is that the United States and China can find enough to agree on so that they can contain the push-and-shove that occurs when the emerging power meets the dominant power. The alternative is not pleasant,” said veteran investor Dan Fuss, vice chairman of Loomis Sayles.

“I think the rate cuts by the Asian central banks were in response to the weakening business environment due to the trade wars. The Fed is influenced by the same things and that will probably cause a further rate cut here.”

Central banks in New Zealand, Thailand and India stunned financial markets on Wednesday with a series of surprising interest rate cuts and pointing to policymakers’ dwindling ammunition to fight off a downturn.

On Thursday, the Philippine central bank joined the bandwagon and cut its key policy rates, whilst keeping the door open for further easing.

Oil jumped more than 2% on Thursday on expectations that falling prices could lead to production cuts.

rose 0.4% to $57.63 per barrel and U.S. West Texas Intermediate (WTI) crude climbed 0.5% to $52.79.

held near the more than six-year peak touched Wednesday, with rising 0.3% to $1,505.20 an ounce as investors sought the safety of the precious metal.

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