SYDNEY (Reuters) – Asian shares started cautiously on Monday as central bank largesse globally boosted sentiment but rising trade tensions between the world’s two biggest economies dulled risk appetite.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1% with South Korea, Australia and New Zealand all starting higher.

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Japan’s Nikkei jumped 1.5% after the Nikkei newspaper reported the country was considering a fresh stimulus package worth over $929 billion that will consist mostly of financial aid programmes for companies hit by the coronavirus pandemic.

Analysts expect trading to be subdued with U.S. and UK markets shut for public holidays.

“Nevertheless, focus is likely to be on China’s National People’s Congress, as discussions of political and economic policies continue,” ANZ analysts wrote in a note.

“Geopolitics will gain attention as U.S.-China relations continue to represent a downside risk for markets,” ANZ added.

On Friday, China proposed imposing national security laws on Hong Kong as Beijing unveiled details of the legislation that critics see as a turning point for the former British colony.

The proposal drew the ire of Hong Kong residents who defied social distancing rules and protested on streets while the United States warned Beijing’s move could lead to U.S. sanctions.

The U.S. Commerce Department said late on Friday it was adding 33 Chinese companies and other institutions to a blacklist for human rights violations and to address U.S. national security concerns.

Sino-U.S. ties have nosedived since the outbreak of the new coronavirus, with the administrations of President Donald Trump and President Xi Jinping trading barbs over the pandemic, including accusations of cover-ups and lack of transparency.

The two superpowers have also clashed over Hong Kong, human rights, trade and U.S. support for Chinese-claimed Taiwan.

At the same time, analysts say extensive central bank stimulus to help blunt the economic shock from the COVID-19 pandemic continues to underpin sentiment and buoy equity markets.

Japan, last week, unveiled a lending programme to channel nearly $280 billion to small businesses hit by the coronavirus. India slashed rates for a second time this year and the European Central Bank, in the minutes from its last meeting, said it was ready to expand emergency bond purchases as early as June.

Later in the day, investor attention will shift to Germany, where the May IFO survey is expected to show some improvement off a record low base.

Action in currencies was a tad muted.

The dollar was up 0.1% on the Japanese yen at 107.73. The euro held near a one-week trough at $1.0903. Sterling added 0.1% to $1.2182 while the Australian dollar gained 0.1% to $0.6543 after losses on Thursday and Friday.

Rising trade tensions hit oil prices with U.S. crude falling 20 cents, or 0.6%, to $33.05 a barrel. Brent was off 31 cents, or 0.9%, at 34.82.

Spot gold was off a bit at $1,730.5 an ounce.