(Refiles to add name of analystin paragraph 5)
* Asian shares off 2-month lows on short-covering
* All eyes on U.S.-china trade talks, U.S. tariffs
* U.S. Treasuries and yen supported
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano
TOKYO, May 10 (Reuters) - U.S. stock futures turned negative and Asian shares pared gains on Friday as global investors waited nervously to see if Washington would suspend its plan to raise tariffs on Chinese imports at midday.
The White House said the two sides would resume negotiations on Friday morning in Washington after concluding the first of two days of talks on Thursday to rescue a trade deal that is close to collapsing . was no word yet from Washington on any change to plans announced made earlier this week to raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent at 12:01 a.m. (0401 GMT). Beijing has vowed to retaliate.
U.S. President Donald Trump said on Thursday he had received a "beautiful letter" from Chinese President Xi Jinping, stoking hopes of a deal.
"Even though talks don't seem to be going that well, there's a glimmer of hope there... it would appear that the extension of the talks is a slight positive. But of course, they've been talking a long time. So it's probably more of a mean reversion trade as opposed to let's buy that dip," said Matt Simpson, senior market analyst at Gain Capital in Singapore.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.8 percent, led by gains in Chinese shares.
Shanghai composite .SSEC rose as much as 3.1 percent before paring some of its gains and last stood up 2.2 percent. .SS
Japan's Nikkei .N225 rose 0.7 percent, while e-mini futures for U.S. S&P500 ESc1 were last down 0.15 percent in volatile trade.
Still gains were driven by short-covering after heavy selling this week. On the week. the Shanghai index is still down 5.9 percent, the Nikkei 3.2 percent, and ex-Japan Asia MSCI 4.2 percent.
"I'd say there's 50 percent chance the tariffs will be raised as announced, which should lead to fresh selling in stocks later today," said Norihiro Fujito, chief investment in Mitsubishi UFJ Morgan Stanley (NYSE:MS) Securities.
Trump also said on Thursday he was taking steps to authorise new tariffs on $325 billion in Chinese imports.
Rising geopolitical tensions are not helping.
North Korea fired what appeared to be two short-range missiles on Thursday in its second such test in less than a week and the United States said it had seized a North Korean cargo ship. Iran, Trump said he could not rule out a military confrontation after Tehran relaxed restrictions on its nuclear programme in response to U.S. sanctions imposed following Trump's withdrawal of the United States from the accord with a year ago. 10-year U.S. Treasuries yield stood at 2.446 percent US10YT=RR near its lowest levels since late March.
In the currency market, the yen is favoured, with the dollar changing hands at 109.83 yen JPY= , having hit a three-month low of 109.47 on Thursday.
The euro firmed slightly to $1.1226 EUR= while the Chinese yuan perked at 6.8453 per dollar CNH=D4 having hit a four-month low of 6.8638 to the dollar the previous day.
MSCI's emerging market currency index .MIEM00000CUS also tumbled to a four-month low.
Oil prices held firm after Trump's comments on Xi's letter raised hopes for a deal for now.
Brent LCOc1 rose 0.5 percent to $70.78 a barrel while U.S. West Texas Intermediate (WTI) crude CLc1 gained 0.8 percent to $62.16.
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https://tmsnrt.rs/2Lzed8e
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