* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* PBoC chief says ample room to ease policy if needed, dlr
rises
* China, Hong Kong markets closed for public holiday
* White House denies delay in Mexico tariffs
* U.S. payrolls seen +185,000 but risks on downside
By Wayne Cole and Swati Pandey
SYDNEY, June 7 (Reuters) - Asian shares were slightly higher
on Friday on expectations global central banks will soon embark
on an easing cycle in the face of international trade frictions
and fears of a world recession.
Those concerns blunted some of the optimism, with liquidity
light during Asian trading as China and Hong Kong markets were
shut for a public holiday.
Japan's Nikkei .N225 ended 0.5% higher, Australia's
benchmark index .AXJO climbed 0.8% while South Korea's Kospi
.KS11 added 0.4%.
In early European trades, the pan-region Euro Stoxx 50
futures STXEc1 were up 0.3%, German DAX futures FDXc1 gained
0.4 while FTSE futures FFIc1 rose 0.2%.
E-Minis futures for the S&P500 ESc1 were last up 0.2%,
pointing to a positive opening for U.S. markets.
"Central banks are waiting for one man to act; Donald
Trump," said Chris Weston, head of research at Melbourne-based
broker Pepperstone, as markets fretted over the U.S. president's
tariff threats on a number of countries including China and
Mexico.
"July will be a big month of central bank easing," he added.
"They hold a wait-and-see attitude and will be nimble in
accordance with the developments."
Financial markets are pricing in a 67% chance of a cut by
the U.S. Federal Reserve at its July 31 meeting while there is a
near 60% chance of a second easing by New Zealand and Australian
central banks next month.
In China, central bank chief Yi Gang said there was plenty
of room for fiscal and monetary policy easing if the protracted
trade war with the United States worsened.
Yi signalled the yuan could ease below 7 if U.S.-China trade
relations turned even more acrimonious. The remarks sent the
dollar 0.2% higher CNH= in a thin Asian market to 6.9429.
As expectations grow for the Fed to lower rates, the dollar
index .DXY , which measures the greenback against a basket of
major currencies, has eased 0.7% this week so far. It was flat
at 97.054.
Investors are now focused on the U.S. employment report
later in the day for further cues about the health of the
world's largest economy.
Market forecasts are for jobs to rise a solid 185,000 in May
and unemployment to stay at a low 3.6%, though much was in doubt
after dismal data on private hiring released earlier in the
week.
"We haven't adjusted our projection of 185,000 for overall
nonfarm payrolls in May," said Kevin Cummins, senior U.S.
economist at RBS.
"However, any major surprises in May payrolls seem tilted to
the low side of our forecast, which wouldn't be too surprising
given the rising uncertainty in the outlook in the U.S. and the
above-trend gain registered in April."
Oddly, a weak number might actually prove positive for
equities since it would bolster the case for an early rate cut
from the Federal Reserve.
Markets have fully priced in a cut by September, and a
further two easings by mid-2020. FEDWATCH
Two-year Treasury yields US2YT=RR were near their lowest
since December 2017 at 1.88%, having fallen 28 basis points in
just two weeks.
That was one reason Asian shares were higher on Friday,
though uncertainty about the global trade disputes checked
investors' enthusiasm.
Mexican and U.S. officials had held a second day of talks on
Thursday amid reports President Donald Trump might delay the
imposition of tariffs that was due on Monday.
The White House later said the tariffs would go ahead as
scheduled, and there were reports Trump might declare a national
emergency to dodge any Senate objections. PUNCH
In currencies, the dollar was steady on the yen at 108.45
JPY= and was off its recent five-month low of 107.80.
It fared less well on the euro which was currently holding
gains of almost 0.9% for the week at $1.1267 EUR= .
The single currency bounced sharply overnight after the
European Central Bank pushed back the timing of any rate hike,
but failed to canvas the policy easing that many had wagered on.
Money market futures are now pricing in a 45% chance of a 10
basis point euro zone rate cut by the end of year versus 75%
before the ECB statement.
"The killer punch came at the press conference with
President Draghi disappointing market's dovish policy pricing
with a series 'optimistic' remarks," noted Rodrigo Catril, a
senior FX strategist at NAB.
"The risk is that once the ECB realises things are really
bad, it will find itself well behind the curve."
In commodity markets, all the chatter of rate cuts globally
kept gold near 15-week highs at $1,332.89 per ounce XAU= .
Oil prices regained a little ground after a rough week but
was still vulnerable to worries about global demand and
oversupply. O/R
Brent crude LCOc1 futures bounced 92 cents to $62.59, but
were still down nearly 3% for the week so far, while U.S. crude
CLc1 firmed 79 cents at $53.38 a barrel.
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Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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(Editing by Sam Holmes & Shri Navaratnam)