Asian stock markets rallied Monday as investors cheered a breakthrough in US-China trade talks that set the stage for presidents Donald Trump and Xi Jinping to perhaps finalise a deal, averting an escalation in the world's biggest trade dispute.

However, European stock markets flattened awaiting interest-rate decisions this week from the Federal Reserve and European Central Bank.

"The renewed hopes for a lessening of trade tensions between the US and China inevitably spilled over to Asian markets," noted Richard Hunter, head of markets at Interactive Investor.

The dollar and gold prices retreated on easing risk sentiment.

Trump arrived in Japan Monday as part of a tour of Asia that could see the president and Xi end their bruising trade war.

Speaking on Air Force One, Trump said he wa

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