Asian markets mostly fluctuated Friday as investors weighed China-US trade speculation, while the pound struggled to recover from the previous day's Brexit bruising.

Hopes that the world's top two economies are making efforts to resolve their painful tariffs standoff provided support to global markets, though conflicting reports were keeping any optimism in check.

On Thursday it was reported that China had handed the US a number of trade concessions as part of a move to smooth relations ahead of a G20 summit where Donald Trump is expected to meet Chinese President Xi Jinping.

The Financial Times also said the two sides were stepping up efforts and that US Trade Representative Robert Lighthizer had told business leaders the next round of tariffs would be put on hold.

While Lighthizer's office denied that, observers said the news still provided some hope.

"Maybe if we can get progress in trade relations, that could be a boost," Jason Browne, chief investment strategist at FundX Investment Group, told Bloomberg News.

However, he added that "the benefits are likely to get offset from expectations of continued (interest rate) hikes from the Fed".

And Stephen Innes, head of Asia-Pacific trade at OANDA, said it appeared the two sides were "looking to kick the can down the road until February to resolve some significant differences".

But he warned "the fear here is that this long and winding road to compromise could be dotted with numerous pratfalls".

In early trade, Hong Kong dropped 0.7 per cent and Shanghai fell 0.3 per cent, while Tokyo was off 0.5 per cent by the break.

Sydney shed 0.2 per cent but Singapore added 0.5 per cent, Seoul gained 0.1 per cent and Manila surged 1.8 per cent. Taipei and Jakarta were also up.

Eyes were on the pound after it dropped like a stone Thursday in response to the resignation of Dominic Raab, the man in charge of Britain's Brexit negotiations, who quit saying he did not agree with Prime Minister Theresa May's draft deal.

His resignation came with those of another key cabinet member and several ministers just hours after May squeezed her hard-fought agreement through the cabinet.

Sterling dropped from a high of USD 1.3072 Thursday to as low as USD 1.2724, and has struggled to break back.

And while May has said she will fight on, speculation is swirling that she could be ousted after leading Brexiteer MP Jacob Rees-Mogg formally called for a vote of no confidence.

"Not surprising that in this fast-changing environment, sterling volatility is the highest since the 2016 Brexit referendum," said National Australia Bank economist David de Garis.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)