TOKYO (Reuters) – Asian shares gained on Tuesday as investors hoped a new round of U.S.-China trade talks would help to resolve a dispute that has dented global growth and some corporate earnings.

Market sentiment also got a boost on news U.S. lawmakers had reached a tentative deal on border security funding that could help avert another partial government shutdown due to start on Saturday. Congressional aides, however, said it did not contain the $5.7 billion President Donald Trump wants for a border wall.

S&P 500 e-mini futures were up nearly 0.5 percent.

Spreadbetters expected European stocks to track Asia and open higher, with Britain’s FTSE gaining 0.25 percent and Germany’s DAX and France’s CAC each adding 0.5 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.3 percent.

The Shanghai Composite Index rose 0.35 percent, South Korea’s KOSPI climbed 0.6 percent and Australian shares were up 0.3 percent.

Japan’s Nikkei advanced 2.6 percent after a market holiday on Monday, lifted by a weaker yen.

U.S. and Chinese officials expressed hopes the new round of talks, which began in Beijing on Monday, would bring them closer to easing their months-long trade war.

Beijing and Washington are trying to hammer out a deal before a March 1 deadline, without which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

“There will be no winner in a trade war. So at some point they will likely strike a deal,” said Mutsumi Kagawa, chief global strategist at Rakuten Securities in Tokyo.

The trade dispute has already started to impact global growth, hitting businesses confidence, factory activity and disrupting supply chains. The worry is that a protracted Sino-U.S. tariff row could severely hurt corporate earnings globally.

Analysts are now expecting U.S. corporate earnings for the current quarter to drop 0.2 percent from last year, which would be the first contraction since the second quarter of 2016.

In the currency market, the dollar held firm, having gained for eight straight sessions against a basket of six major currencies until Monday, its longest rally in two years.

Although the Federal Reserve’s dovish turn dented the dollar earlier this year, some analysts noted the U.S. currency still has the highest yield among major peers and that the Fed continues to shrink its balance sheet.

“We see the dollar’s strength essentially stemming from the Fed’s balance sheet reduction,” said Makoto Noji, chief currency and foreign bond strategist at SMBC Nikko Securities.

Growing evidence of a loss of momentum in the global economy has also lifted the U.S. currency, most recently led by the European Commission’s downgrade of growth in Europe, making the dollar a better investment option by default.

The dollar index rose to its highest in almost three months, at 97.123, on Monday. It last stood at 97.055.

In contrast, the euro dropped to as low as $1.1267, its weakest in 2-1/2 months, and last traded at $1.1277.

The dollar popped up to a six-week high of 110.65 yen.

Oil prices ticked up after falls on Monday as traders weighed support from OPEC-led supply restraint and a slowdown in the global economy.

U.S. crude futures traded at $52.68 per barrel, up 0.5 percent. Brent crude rose 0.6 percent to $61.89 per barrel.