Major Asian stock markets recovered from earlier lows to close higher on Thursday as investors watched for developments on the U.S.-China trade front ahead of high-level negotiations between the two economic powerhouses.
Mainland Chinese stocks rose on the day, with the Shanghai composite up 0.78% to around 2,947.71 and the Shenzhen component gaining 1.38% to 9,638.10. The Shenzhen composite also advanced 1.413% to approximately 1,631.84.
The New York Times reported Wednesday evening stateside that U.S. President Donald Trump's administration is set to grant licenses that would allow American firms to sell nonsensitive supplies to Huawei. Earlier this year, the White House banned sales to the Chinese telecommunications giant, citing national security concerns. The ban was subsequently delayed by the administration to allow American firms to make other arrangements.
Meanwhile, Hong Kong's Hang Seng index was about 0.3% higher, as of its final hour of trading.
Elsewhere, the Nikkei 225 in Japan rose 0.45% to close at 21,551.98. The Topix index finished its trading day little changed at 1,581.42. Core machinery orders in the country fell for the second consecutive month in August, according to Cabinet Office data on Thursday.
Overall, the MSCI Asia ex-Japan index was 0.18% higher.
Markets in Taiwan were closed on Thursday for a holiday.
Investors are monitoring chatter on U.S.-China trade talks, which are set to begin Thursday stateside amid a series of rapid developments. A South China Morning Post report on Thursday morning in Asia said the two sides made no progress in deputy-level negotiations this week. In discussions that were held earlier in the week, China refused to discuss the issue of forced technology transfers, the report said.
The SCMP report also said that high-level trade negotiations including Chinese Vice Premier Liu He would be cut to one day now, with the delegation from Beijing set to leave Washington on Thursday instead of Friday as originally planned.
For its part, a White House spokesperson told CNBC's Kayla Tausche: "We are not aware of a change in the Vice Premier's travels plans at this time."
A senior administration official also told Tausche that Liu is still scheduled to depart on Friday evening.
The trade negotiations between Washington and Beijing this week were highly anticipated. The two largest economies have struggled to reach a deal to end their trade war that has now lasted for more than a year. Washington and Beijing have slapped tariffs on billions of dollars worth of each other's goods.
"As of right now, [Pres. Trump] has not made up his mind because he does not know what they're going to offer," a senior official said.
A principal in the negotiations later told CNBC, however, that Friday's session is now an "open question."
Bloomberg News also reported overnight that the U.S was considering an agreement to suspend next week's tariff increase in exchange for a currency pact. The U.S. previously announced it will increase duties on $250 billion worth of Chinese goods from 25% to 30% on October 15. A 15% tariff on an additional $160 billion worth of Chinese imports is also expected to kick in on December 15.
"The prize for some sort of trade deal today — no matter how trivial — will be to avoid the implementation of further tariffs," Robert Carnell, chief economist and head of research for Asia Pacific at ING, wrote in a note.
"I think that a 'nothing achieved' outcome from today's talks would return markets to a risk-off mode fairly quickly," Carnell said.
One political science expert told CNBC on Thursday that he was "quite pessimistic about a quick resolution" being reached from the negotiations.
"What happens is that there is sort of a truce in the trade talks," Pushan Dutt, professor of economics and political science at INSEAD, told CNBC on Thursday. "Markets get lulled into expecting that ... good things will happen, then along comes a tweet or a tirade and then we're back int his position of escalating tariffs and tit-for-tat tariffs."
U.S. stock futures saw wild trading following the SCMP report, with Dow Jones Industrial Average futures plunging more than 300 points at one point. They later saw a recovery from those lows as more developments emerged. As of 2:52 a.m. ET Thursday, futures pointed to an opening decline of 22.01 points for the Dow. S&P 500 and Nasdaq-100 futures also pointed to slight declines for the two indexes at Thursday's open on Wall Street.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.889 after seeing an earlier high of 99.067.
The Japanese yen, often seen as a safe-haven currency in times of market turmoil, traded at 107.51 per dollar after touching an earlier high of 107.02. The Australian dollar changed hands at $0.6745 following a low of $0.6707 seen earlier.
Oil prices declined in the afternoon of Asian trading hours, with international benchmark Brent crude futures slipping 0.1% to $58.26 per barrel. U.S. crude futures also shed 0.19% to $52.49 per barrel.
— CNBC's Kayla Tausche and John Melloy contributed to this report.