GLOBAL MARKETS-Asian shares buoyed by U.S. jobs, trade talks in focus

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Fall in U.S. jobless rate pushes stocks higher
* Unrest in Hong Kong could weigh on market sentiment
* Investors are nervous before U.S.-China trade talks

By Stanley White
TOKYO, Oct 7 (Reuters) - Asian shares edged higher on Monday
after data showed the U.S. unemployment rate dropped to the
lowest in almost 50 years, easing concerns of a slowdown in the
world's largest economy.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.25%. Japan's Nikkei stock index .N225
rose 0.29%, while Australian shares .AXJO were up 0.48%
U.S. Treasury yields inched higher as Friday's data on the
U.S. jobs market suggests the Federal Reserve may not need to
cut interest rates further.
Sentiment toward the U.S. economy deteriorated sharply last
week after disappointing data on manufacturing and services
suggested the trade war was taking a toll, and more rate cuts
would be needed to avert a potential recession in the world's
biggest economy.
The modest increase in U.S. jobs has eased some of these
concerns, but traders warn that downside risks loom large on the
horizon. The U.S. unemployment rate fell to 3.5% in September to
reach the lowest since December 1969. Non-farm payrolls also
grew in September, but slightly less than expected. The focus will shift to the next round of U.S.-China trade
negotiations expected in Washington on Oct. 10-11 to see if the
two sides can end a bruising year-long trade war that has hurt
global growth and raised the risk of recession.
"Moderate job growth and subdued inflation in the United
States is a positive for stocks," said Shusuke Yamada, head of
FX and Japan equity strategy at Merrill Lynch Japan Securities
in Tokyo.
"However, the dollar is a little soft heading into U.S.-China
trade talks. I see some scope for yen gains, but it is not
likely to be a big move higher."
U.S. stock futures, ESc1 fell 0.35% in Asia on Monday
after the S&P 500 .SPX ended 1.4% higher on Friday.
In currency markets, the yen gained slightly and the yuan
slipped after Bloomberg reported that Chinese officials are
signalling they are increasingly reluctant to agree to a broad
trade deal pursued by U.S. President Donald Trump. The yuan weakened about 0.20% in offshore trade to 7.1285
yuan per dollar CNH= . There is no onshore trading as Monday is
the last day of China's holiday break.
The United States and China have slapped tariffs on each
other's goods as part of a long-running dispute over Beijing's
trading practices, which Washington says are unfair.
Central banks around the world have been easing policy to
offset the negative impact from the trade war.
The Fed has already lowered interest rates twice this year,
but a strong jobs market suggests further rate cuts may not be
necessary.
The yield on benchmark 10-year Treasury notes US10YT=RR
rose to 1.5187% compared with its U.S. close of 1.5140% on
Friday.
Worries about political instability in Hong Kong could hurt
market sentiment after China's army took the unusual step of
issuing warnings to anti-government protestors in Hong Kong over
the weekend. Four months of often violent protests against Chinese rule
has pushed the former British colony to the brink of recession
and posed a serious challenge to Beijing's control of the city.
Spot gold XAU= , an asset that is often bought during times
of uncertainty as a safe-haven, rose 0.26% to $1,508.19 per
ounce. GOL/
The yen JPY=EBS , also considered a safe-haven asset edged
slightly higher to 106.78 versus the U.S. dollar and gained to
72.20 per Australian dollar AUDJPY= .
U.S. crude CLc1 dipped 0.34% to $52.63 a barrel as worries
about oversupply regularly weigh on oil futures prices.

(Editing by Jacqueline Wong)