Asian markets enjoyed broad gains for a third day on Wednesday but investors moved more cautiously as they took stock of the latest trade developments and possible headwinds.
New York provided another record lead on lingering optimism after the United States and Mexico agreed on a revised free-trade deal and Canada began talks that could see it join them.
However, while the news was seen as a much-needed boost after Donald Trump threatened to tear up the North American Free Trade Agreement when he took office, there remain concerns about his tariffs row with China that has rattled markets for months.
Washington could soon also impose levies on $200 billion of Chinese goods, which would come on top of the $50 billion already being hit.
"Latest news headlines seem to be easing market worries over a trade war for now," Kengo Suzuki and other forex strategists at Mizuho Securities said in a note.
"But it may be a bit too early to become fully optimistic, given fears that the Trump administration may impose additional tariffs on $200 billion worth of Chinese goods as early as next month and US-China summit talks are expected after the US mid-term elections in November," they said.
Still, for now traders are upbeat. Tokyo finished 0.2 percent higher -- a seventh straight gain -- and Sydney rose 0.8 percent while Singapore edged up 0.1 percent and Seoul put on 0.3 percent.
Wellington and Taipei saw sharp gains but in afternoon trade Hong Kong was 0.1 percent lower and Shanghai ended down 0.3 percent.
"Overall the US-Mexico deal has deflected attention away from Trump's legal setbacks as investors may see the light at the end of the tunnel -- hoping that the US-Sino trade dispute can end in an equally friendly manner," Stephen Innes, who heads Asia-Pacific trade at OANDA, said in a note.
David Ader, chief market strategist at Informa Financial Intelligence, said stocks remained buoyant despite the caution on trading floors.
"I tend to be more pessimistic that we are going to come away with trade deals that are going to make everybody satisfied," he told Bloomberg TV, "but we are trading headlines, we are trading the sensitivity to those headlines, so for the moment it looks good."
On currency markets the Mexican peso gave up all the gains made on the back of the trade deal news and was down 1.7 percent Wednesday as observers questioned the agreement.
Its "underperformance can be attributed to numerous reports suggesting the preliminary trade agreement... is far from complete and it still needs US Congress approval", said Rodrigo Catril, senior foreign exchange strategist at National Australia Bank.
"In a nutshell it seems that many contentious issues remain unresolved and there is a very tight timeline that needs to followed if a NAFTA deal is to be ratified by the current US Congress."
The pound extended losses after British Prime Minister Theresa May seemed to hint she was open to a possible no-deal Brexit, saying leaving the EU without an agreement would not be a disaster.
In early European trade London and Paris each rose 0.2 percent, while Frankfurt put on 0.1 percent.
Key figures around 0720 GMT
Tokyo - Nikkei 225: UP 0.2 percent at 22,848.22 (close)
Hong Kong - Hang Seng: DOWN 0.1 percent at 28,330.31
Shanghai - Composite: DOWN 0.3 percent at 2,769.29 (close)
London - FTSE 100: UP 0.2 percent at 7,630.03
Euro/dollar: DOWN at $1.1670 from $1.1698 at 2100 GMT
Pound/dollar: DOWN at $1.2847 from $1.2896
Dollar/yen: UP at 111.21 yen from 111.07 yen
Oil - West Texas Intermediate: DOWN seven cents at $68.46 per barrel
Oil - Brent Crude: DOWN 18 cents at $75.77
New York - Dow Jones: UP 0.1 percent at 26,064.02 (close)