GLOBAL MARKETS-Bond yields near record lows, shares struggle on darkening global outlook

* Yields on U.S. 30-year bonds, 10-year German bunds at
record low
* Gold near 6-year high, silver shines
* Stocks in Asia flat in early trade

By Hideyuki Sano
TOKYO, Aug 29 (Reuters) - Global bond yields flirted with
record low levels while stocks struggled to recover on Thursday
as economic turbulence from intensifying U.S-China frictions and
the spectre of a no-deal Brexit drove investors to safer
harbours.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was flat in early trade while Japan's Nikkei
.N225 rose 0.14%.
On Wall Street, the S&P 500 .SPX gained 0.65%, due in part
to gains in energy sector following a rebound in oil prices.
Sharp falls in U.S. Treasury yields also meant equities
might be attractive for some investors even though traders in
stocks globally have bailed out in droves in the past several
months due to recession worries.
Bond markets around the world painted a gloomier picture,
with yields on 30-year U.S. Treasuries and 10-year German bunds
yield both hitting record lows - 1.905 percent US30YT=RR and
minus 0.716 percent DE10YT=TWEB on Wednesday. Inversion
remains a prominent feature across the U.S. yield curve, where
short-dated yields are running above long-dated ones, which has
also unsettled investors. Yield curve inversion often precedes a
recession.
The Italian 10-year bond yield IT10YT=TWEB briefly fell
below one percent for the first time ever. The rush to buy
Italian debt, which carries higher yields than the 'core' euro
zone countries, was prompted by growing hopes that a new
government will soon be formed in Rome and a new election
averted. In Asia, the 10-year Japanese government bond yields
JP10YTN=JBTC stood at minus 0.280 percent, just above its
record low of minus 0.300 touched in 2016.
"Falls in global bond yields reflect growing concerns that
long-term global growth are slowing down on U.S.-China tensions
and subsequent global supply chain disruptions," said Tomoo
Kinoshita, global market strategist at Invesco Asset Management
in Tokyo.
"Stock markets on the other hand are supported in the
near-term by hopes of more stimulus, notably from the Federal
Reserve and the European Central Bank," he said.
The two major central banks are expected to cut rates next
month, while many investors believe the Bank of Japan could join
the fray if market sentiment weakens further.
The Trump administration on Wednesday made official its
extra 5% tariff on $300 billion in Chinese imports and set
collection dates of Sept. 1 and Dec. 15.
That means products such as smartwatches, Bluetooth
headphones, flat panel televisions and many types of footwear
will be levied from next month, raising worries about U.S.
consumption, one of the few remaining bright spots in the world
economy. The precious metal markets highlighted investors' quest to
buy safer assets.
Gold XAU= stood at $1,539 per ounce, near six-year highs
of $1,527.5 set earlier in the week while silver XAU= extended
its bull run to edge near its 2017 peak, fetching $18.32 per
ounce, having risen nearly five percent so far this week.
In the currency market, major currencies saw limited moves
for now, with the yen flat at 106.08 per dollar JPY= and the
euro fetching $1.1084 EUR= .
But the MSCI emerging market currency index .MIEM00000CUS
is at lowest levels since mid-November, having fallen 0.8% so
far this week and on course to mark its biggest monthly fall in
more than seven years driven by worries about global slowdown.
The British pound licked wounds at $1.2217 GBP= , having
slumped 0.61% the previous day as the most serious UK political
crisis in decades deepened after Prime Minister Boris Johnson
decided to suspend Britain's parliament for more than a month
before Brexit.
The move will limit the time opponents have to derail a
disorderly Brexit but also increases the chance that Johnson
could face a vote of no-confidence in his government, and
possibly an election. "From an economic point of view, actively pursuing a no-deal
Brexit through suspending parliament is tantamount to actively
pursuing a recession," said Seema Shah, Chief Strategist,
Principal Global Investors in London.
Oil prices held firm after a gain of nearly 2% in the
previous session as a larger-than-expected decline in U.S. crude
stockpiles helped ease worries about weakening oil demand.
In Asia Brent crude LCOc1 futures fell 0.1% to $60.43 a
barrel while U.S. West Texas Intermediate (WTI) crude CLc1
gained 0.18% to $55.88 per barrel.