Asian shares eked out cautious gains on Wednesday, as higher Wall Street futures provided some relief after an overnight US selloff, though deeper worries about the global economy and trade have kept a lid on sentiment.
Japan's Nikkei rose 0.15 percent, Australia's shares climbed 0.13 percent while Korea's KOSPI was up 0.4 percent. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.06 percent, dragged lower by Chinese markets.
Gold prices fell in a tentative sign of easing risk aversion, but a deep inversion in the US Treasury yield curve served as a reminder that some investors are still concerned about economic growth.
A trade dispute between the United States and China is now in its second year and is placing increasing strain on the global economy, forcing policy makers to respond with interest rate cuts and stimulus measures to bolster growth.
"Bonds are rallying and there is limited upside for stocks right now," said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo.
"But I don't want to give up on equities just yet. The US Federal Reserve and officials in other countries simply have to do more to stimulate their economies, which will eventually prevent the bottom from falling out."
US stock futures were 0.27 percent higher, which helped ease investors' nerves in Asian trading after the S&P 500 fell 0.33 percent on Tuesday.
US crude rose 1.02 percent to $55.49 a barrel, supported by a drawdown in US crude inventories.
Spot gold fell 0.5 percent to $1,538.00 per ounce, pulling back from a six-year high.
South Korea stocks rose 0.5 percent, on course for their biggest daily increase in a week as investors hunted for bargains after shares were sold due to worries about weighting changes in the MSCI index.
China unveiled measures late on Tuesday to help boost consumption, including the possible removal of restrictions on auto purchases, as growth in the world's second-biggest economy falters.
Chinese shares initially opened higher on Wednesday but then reversed course to trade 0.56 percent lower, showing there are still some concerns about economic growth.
Shares in Hong Kong swung between gains and losses as increasingly violent protests against China's "one country, two system" rule of the former British colony hurt sentiment.
Investors are also focused on Sept. 1, when the first stage of US tariffs on $300 billion worth of Chinese goods is scheduled to go into effect. In response, China has unveiled tariffs on US products set to go into effect the same day.
A bond yield curve inverts when long-term yields trade below short-term yields and is commonly considered a signal of an impending economic recession.
The yield on benchmark 10-year Treasuries stood at 1.4761 percent, compared with the two-year yield of 1.5159 percent. The yield curve inversion is the deepest since May 2007, when the U. subprime financial crisis started to unfold.
Yields on 30-year Treasuries stood at 1.9441 percent, below 3-month T-bill yields of 1.9951 percent, which some traders say is an even more bearish signal.
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