Asian shares scaled eight-month peaks on Friday as a last-gasp Sino-U.S. trade deal and a likely major election win by Britain`s Conservative Party looked to have cleared a couple of dark clouds from the global horizon.

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The double dose of relief slugged safe-haven sovereign bonds and the Japanese yen, and led markets to scale back the chance of more interest rates cuts around the world.

"Global investors have been given two of the biggest gifts on their Christmas list and should be appreciative for a while at least," said Sean Callow, a senior forex analyst at Westpac. "Global equity indices such as MSCI World should set more record highs and sterling could push above $1.36."

The pound hit its highest since mid-2018 as UK exit polls seemed to rule out a shock win by the left-wing Labour opposition, and could help clarify the outlook for Brexit.

Polls suggested Prime Minster Boris Johnson could gain a commanding 368 seats in Britain`s Parliament, settling another long-standing uncertainty.

The pound was last up 2.4% at $1.3476 and reached levels on the euro not visited since mid-2016.

A wave of trade euphoria had already lifted Wall Street to record highs. Reuters reported the United States has agreed to reduce some tariffs on Chinese goods and delay a tranche of tariffs as part of a phase one deal.

China also has agreed to make $50 billion in agricultural purchases in 2020 as part of the deal, that person and another U.S. source familiar with the talks said.

"If the U.S. cuts the current tariffs to some extent as reported, that is not something markets have priced in, so we could see a further leg up in the stock market," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. "The Conservatives appear to be on course for a big win. We are now finally seeing a clear direction on Brexit after three years of deadlock."

LESS NEED FOR MORE CUTS?
In Asia, Japan`s Nikkei climbed 2.4% to a 14-month top, while South Korean stocks firmed 1.3%.

MSCI`s broadest index of Asia-Pacific shares outside Japan climbed 1.2% to its highest since late April. Shanghai blue chips advanced 1.4%.

E-Mini futures for the S&P 500 rose 0.4% to another peak, and EUROSTOXX 50 futures gained 0.9%. FTSE futures eased 0.2%, perhaps because a Tory win had already been priced in.

Wall Street had celebrated the trade news with record highs. The Dow <.DJI> ended Thursday up 0.79%, while the S&P 500 gained 0.86% and the Nasdaq 0.73%.

That was bad news for bonds and yields on U.S. 10-year Treasuries shot up to 1.91%, a rise of 12 basis points in just two sessions.

Interest rate futures slipped as investors priced in less chance of a rate cut from the Federal Reserve next year - a shift seen across a range of developed nations.

Other safe harbours also took a beating, with the yen sliding across the board. The dollar firmed further to 109.52 yen having risen 0.7% overnight.

The dollar fared less well elsewhere as the pound and the euro both benefited from the UK exit polls. The euro added 0.4% to $1.1176 , while the dollar slipped to 96.742 on a basket of currencies.

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The dollar also lost out to the Chinese yuan to hit an 18-week low as any trade truce would be seen as a boon for the export-heavy economy. The dollar was last at 6.9715 yuan having shed a steep 1.2% overnight.

The shift from safe havens left spot gold flat at $1,468.48 per ounce .

Oil prices rallied on hopes a trade deal would support global growth and thus demand. 

U.S. crude added 35 cents to $59.53 a barrel, while Brent crude rose 47 cents to $64.67.