(Updates with fresh levels throughout, adds analyst comment)
* MSCI ex-Japan up 0.15 pct, South Korea's Kospi pares losses
* Trade volatile as U.S.-North Korea summit gets underway
* Dollar rises to the highest in 3 weeks against yen
By Swati Pandey
SYDNEY, June 12 (Reuters) - The dollar hovered near 3-week highs on Tuesday and Asian shares gained as U.S. President Donald Trump and North Korean leader Kim Jong Un signed a 'comprehensive' deal at a historic summit aimed at the denuclearisation of the Korean peninsula.
Trump said the process of denuclearisation would happen "very, very quickly", adding he had formed a "special bond" with Kim and the relationship with North Korea would be very different.
"The letter that we're signing is very comprehensive and I think both sides are going to be very impressed with the result," Trump said after a "really very positive" summit meeting in Singapore.
"A lot of goodwill went into this, a lot of work, a lot of preparation."
Both leaders are set to hold a press conference later.
The dollar rose against the safe-haven yen, while the Korean won pared gains to stay near a recent two-week trough. Spreadbetters pointed to a firm start for Europe while E-Minis for the S&P 500 also gained 0.1 percent.
Kim had earlier said the meeting was "a good prelude to peace", just months after the two leaders traded insults and tensions spiralled in the region over the reclusive regime's nuclear programmes.
Yet, there was some unease among investors about the outcome of the talks given the tense relations between the two nations. The combatants of the 1950-53 Korean War are technically still at war, as the conflict, in which millions of people died, was concluded only with a truce.
In Asian equity markets, trading was volatile with Japan's Nikkei paring early gains to close 0.3 percent higher after earlier rising as much as 0.9 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan seesawed between positive and negative territory, and was last up 0.15 percent. South Korean shares were a tad weaker while Chinese shares were buoyant after starting in the red. The blue-chip CSI 300 index jumped about 1.3 percent.
"The peace on the Korean peninsula could deliver significant benefits to both North and South Korea, including potentially a re-rating for South Korean stocks," analysts at Singapore's DBS said in a note. "The landmark summit meeting should help to remove a major tail risk for the region's markets and economies," they added.
"However, it would be prudent to contain excessive optimism, given the enormous gulf between the two Koreas and the costs of reunification."
Many analysts were uncertain about the overall impact on global economies and markets from the peace talks, with some pointing to a growing risk of an international trade war as a much bigger headwind to world growth.
Just this past weekend, Trump upset the Group of Seven's efforts to show a united front, choosing to back out of a previous joint communique. The action drew criticism from Germany and France, and Trump called Canadian Prime Minister Justin Trudeau "very dishonest and weak."
However, "markets are generally shrugging off the G7 trainwreck," said Ray Attrill, head of forex strategy at National Australia Bank.
Instead, they are looking ahead to a busy week.
Tuesday's North Korea summit will be followed by policy meetings of the U.S. Federal Reserve and the European Central Bank as well as a Brexit bill vote in the British parliament.
The dollar was well bid on Tuesday, up 0.2 percent against a basket of major currencies.
The U.S. Federal Reserve is virtually guaranteed to raise interest rates this week while investors are focused on the U.S. monetary policy outlook.
On the safe haven yen, the dollar jumped to a three-week top of 110.49 in early deals. It was last at 110.37.
Helping calm markets were comments from Italy's new coalition government that it had no intention of leaving the euro zone and planned to cut debt.
The euro stepped back from a three-week high of $1.1840 to be last down 0.2 percent at $1.1764.
In commodities, U.S. crude was rose 10 cents to $66.20 per barrel, while Brent climbed 4 cents to $76.49.
Spot gold slipped 0.2 percent to $1,297.12 an ounce.
Editing by Shri Navaratnam