Asian shares rebound after Xi, Biden discuss troubled ties

Shares advanced in Asia on Friday as investors step up buying despite another decline on Wall Street that kept the S&P 500 and the Nasdaq on track for their first weekly losses in three weeks.

Benchmarks rose in Tokyo, Shanghai and Hong Kong after President Joe Biden spoke with China’s Xi Jinping on Thursday amid growing frustration on the American side over stalled high-level engagement between the two leaders.

The yield on the 10-year Treasury note was steady at 1.31% and U.S. futures were higher.

Markets appeared to take in stride a decision by the European Central Bank on Thursday to dial back some of its massive emergency pandemic support for the economy amid signs of increasing business activity and consumer readiness to spend as the 19 countries that use the euro rebound from the coronavirus recession.

Analysts said investors were reassured by ECB head Christine Lagarde's insistence that the shift was only a “recalibration” of existing stimulus — not a signal that pandemic support is being phased out.

Tokyo's Nikkei 225 gained 1.3% to 30,381.84 while the Hang Seng in Hong Kong jumped 1.5% to 26,109.21. South Korea's Kospi added 0.4% to 3,126.57. The Shanghai Composite index climbed 0.4% to 3,708.24.

“President Biden and Xi's phone call has spurred hopes of a thaw in U.S.-China relations. That is ostensibly good for trade everywhere and spurred a decent rally in stocks across Asia," Jeffrey Halley of Oanda said in a commentary.

Biden initiated the 90-minute call with Xi, which centered on discussing the way ahead for the U.S.-China relationship. The White House said the leaders during the call agreed to engage “openly and straightforwardly” on issues where the nations are at odds and where there is agreement.

Investors are assessing the pace of economic...