* Asian shares bounce back from 14-month low
* Report of U.S. outreach to China raise hopes of policy shift
* Turkish lira in focus as central bank seen raising rates
By Hideyuki Sano
TOKYO, Sept 13 (Reuters) - Asian shares won a reprieve on Thursday as news the Trump administration has reached out to China for a new round of trade talks raised hopes a deal could be struck in the bitter tariff dispute between the world’s two biggest economies.
MSCI’s broadest index of Asia-Pacific shares outside Japan inched 0.2 percent higher in early trade, a day after it hit 14-month lows, while Japan’s Nikkei gained 0.8 percent.
On Wall Street, the S&P 500 was up 0.04 percent.
Senior U.S. officials led by Treasury Secretary Steven Mnuchin recently sent an invitation to their Chinese counterparts, including Vice Premier Liu He, to hold another bilateral trade meeting.
The news comes as more than 85 U.S. industry groups launched a coalition on Wednesday to take public its fight against President Donald Trump’s trade tariffs.
Trump’s tariffs have escalated far beyond what business groups once imagined as the administration prepares to activate duties on $200 billion worth of Chinese goods, hitting a broad array of internet technology products and consumer goods from handbags to bicycles to furniture.
“Public support for Trump has fallen in recent weeks, with Democrats seen likely to capture the House of Representatives. He probably needs some sort of achievements on trade ahead of the mid-term elections,” said Mutsumi Kagawa, chief global strategist at Rakuten Securities.
“So there could be a shift in his trade policy. He will surely keep his hard line rhetoric but his administration may seek to make some deals behind the scene,” he said.
Any serious signs of easing in trade tensions should benefit shares in China and other Asian courtiers the most given they have borne the brunt of U.S. protectionist moves. The trade tensions have hammered global riskier assets over the past few months as policy makers and investors worried about the hit to the world economy.
MSCI’s broad emerging markets index has already fallen more than 20 percent from its peak in January, entering bear market territory.
In the currency market, the dollar eased a little on the trade talk hopes as well as on soft U.S. wholesale price data, which undermined the case for a faster pace of policy tightening by the Federal Reserve.
U.S. producer prices unexpectedly fell in August, recording their first drop in 1-1/2 years and denting talk of accelerating inflation following Friday’s strong wage data.
The euro traded at $1.1628, extending its gain so far this week to 0.61 percent while the yen changed hands at 111.12 per dollar, having gained 0.35 percent on Wednesday.
Sterling held near six-week high of $1.3087 Brexit-supporting lawmakers in British Prime Minister Theresa May’s party publicly pledged support for her to stay in power.
The European Central Bank and the Bank of England will hold a policy meeting on Thursday, but both are widely expected to leave interest rates unchanged.
Perhaps attracting more attention is a rate-setting meeting by the Turkish central bank, which is expected to raise interest rates to shore up its battered lira.
The lira has lost more than 40 percent of its value against the dollar this year, hit by worries over President Tayyip Erdogan’s grip on monetary policy and over a diplomatic spat between Ankara and Washington.
The lira crisis has spread to some other emerging market currencies.
The lira traded at 6.3450 per dollar, up about 1.1 percent on the week and off its record low of 7.240 marked exactly a month ago.
Oil held firm after a larger-than-expected drop in U.S. crude inventories and as U.S. sanctions on Iran added to concerns over global oil supply.
Brent futures hit $80 per barrel on Wednesday and last stood at $79.64, down slightly from Wednesday’s close but up 3.7 percent on the week.
Editing by Shri Navaratnam