GLOBAL MARKETS-Asian shares at near 3-year peak, dollar soft in U.S. deadlock trade

NEW YORK, Nov 5 (Reuters) - A gauge of Asian shares was set
to cling to a near three-year peak while the dollar stayed
sluggish on Friday as the prospect of a divided U.S. legislature
dimmed the chance of major policy changes, lifting risk
appetite.
Brushing aside the uncertainty of an exceedingly close U.S.
presidential election, investors overnight snapped up riskier
assets such as the Australian dollar AUD= , which jumped to a
six-week high before running into profit-taking in early Asian
trade.
Even gold, a traditional safe-haven asset, rallied overnight
as investors looked forward to the conclusion of the U.S.
election as a precursor to more fiscal stimulus in the world's
largest economy.
Australian shares .AXJO jumped 0.7% and MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added
0.22% to a level last seen in February 2018. But in a sign gains
may be limited, Japan's Nikkei futures NKc1 fell 0.2% while
E-Mini futures for the S&P 500 ESc1 were flat.
Democrat Joe Biden crept closer to victory over U.S.
President Donald Trump on Thursday by leading with razor-thin
margins in a handful of states where votes are still being
counted. Though it is not clear who will emerge the winner in the
presidential race, analysts said more U.S. fiscal stimulus is on
the cards, regardless of the election outcome.
"We still anticipate that there will be a fiscal package in
excess of $1 trillion next year," said James Knightley, chief
international economist at ING Group.
"This stimulus, when combined with a long-anticipated
COVID-19 vaccine, can really lift the economy and drive growth.
We consequently remain very upbeat on the prospects for 2021 and
2022."
Analysts increasingly expect the U.S. legislature to be
split, with the Democrats controlling the House of
Representatives, while the Republicans retain control of the
Senate.
The upbeat mood took its toll on the dollar =USD , which
was sluggish at 92.530 against a basket of six currencies after
hitting a two-week low overnight. USD/
A promise by the Federal Reserve on Thursday to keep its
monetary policy loose and do whatever it takes to sustain an
unsteady U.S. economic recovery also weighed on the dollar.
A softer dollar supported the Japanese yen JPY= , which
climbed to a near eight-month high of 103.43 yen against the
dollar overnight. It was steady in early Asian trade at 103.52
yen.
Gold XAU= , which is limited in supply and seen as a hedge
against inflation in an era of ultra-loose monetary and fiscal
policies, was firm at $1,949.0599 an ounce after jumping over 2%
overnight. GOL/
U.S. Treasury yields drifted lower again as investors bet
that a divided U.S. government will cap debt-funded government
spending and limit bond supply.
Ten-year Treasury yield US10YT=RR edged lower to 0.7663%,
more than 150 basis points below the pre-U.S. election level
seen on Tuesday. It had struck a three-week low of 0.7180% on
Thursday. US/
Oil prices were sluggish after a bout of profit-taking in
early trade. Brent crude LCOc1 was down 1.04%, or 43 cents, at
$40.80 a barrel. O/R