Asian shares won a modest reprieve on Friday after China and the United States agreed to hold their first trade talks since June next week and as the Turkish lira extended gains from its record low earlier this week. MSCI`s broadest index of Asia-Pacific shares outside Japan was up 0.2 percent in early trade, a day after it hit its lowest level in a year.

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Japan`s Nikkei gained 0.5 percent while in U.S. markets, the Dow Jones Industrial Average rose 1.58 percent and the S&P 500 gained 0.79 percent.

MSCI`s index of world stocks rose 0.63 percent on Thursday.

News that a Chinese delegation led by Vice Minister of Commerce Wang Shouwen will meet U.S. representatives helped boost confidence.

But the impact could be short-lived as such lower-level talks alone are unlikely to resolve the ongoing trade dispute. White House Economic adviser Larry Kudlow warned Beijing not to underestimate President Donald Trump`s resolve in pushing for changes in China`s economic policies.

Indeed, Chinese shares markets were hardly impressed by the news on Thursday, with the Shanghai composite index ending down 0.66 percent at 2,705.19, just 0.03 point above 2-1/2 year closing low set on Monday last week.

That also weighed on MSCI emerging markets index, which closed at 13-month low on Thursday.

Their weakness stemmed also from falls in their currencies after the Turkish lira had plunged this month on concerns about diplomatic rifts between Ankara and Washington.

"Because of the currency crisis in Turkey, investors are shifting funds from emerging markets to developed markets," said Shuji Shirota, head of macro economic strategy at HSBC Securities in Tokyo.

"But if you look at longer-term prospects, the U.S. could be affected if the trade disputes linger. Given a U.S. president tends to do badly in his first mid-term election, he might do more on trade issues after the election," he added.

In the currency market, the lira has bounced back to 5.815 per dollar, up almost 25 percent from its record low of 7.2400 hit early on Monday, despite threats of more sanctions from Washington.

It has gained some support from the announcement late on Wednesday of a Qatari pledge to invest $15 billion in Turkey.

The Chinese yuan posted its biggest daily gain since January 2017 in offshore trade on Thursday, rising 1.2 percent, following the trade talks news.

The yuan last stood at 6.8672 per dollar , off Wednesday`s 19-month low of 6.9587. 

The euro, which has been affected by concerns about European banks` exposure to Turkey, traded at $1.1375 , off 13-1/2-month low of $1.1301 on Wednesday.

The yen changed hands flat at 110.97 per dollar . 

The pound rose 0.12 percent on Thursday after ten straight days of falls though concerns about a hard Brexit continued to undermine the sterling.

Oil firmed on Thursday thanks in part to a recovery in global shares, though a weakening outlook for crude demand kept prices in check.

Brent crude oil futures fetched $71.27 a barrel, down 0.2 percent in Asia on Friday after 0.69 percent rise the previous day. They are on course to log the seventh straight week of losses.

U.S. crude futures stood at $65.31 a barrel, down 0.23 percent.