GLOBAL MARKETS-Asia stocks, bond yields rise as trade war fears ease

* MSCI Asia-Pacific index up 0.2%, Nikkei gains 1%
* Trump predicts trade deal after positive gestures by China
* Dollar lifted as safe-haven bond yields rise
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Shinichi Saoshiro
TOKYO, Aug 27 (Reuters) - Asian stocks tracked global peers
higher on Tuesday while safe-haven bonds sold off as signs
Sino-U.S. trade hostilities might be easing helped restore
investor confidence after the previous session's rout.
Supporting the market mood, U.S. President Donald Trump on
Monday flagged the possibility of a trade deal with China and
said he believe Beijing was sincere in its desire to reach an
agreement. Global markets had been roiled at the start of the
week by new tariffs from the world's two largest
economies. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was up 0.2% after dropping 1.3% the previous
day.
South Korea's KOSPI .KS11 added 0.8% and Japan's Nikkei
.N225 rose 1%.
Equity markets may have found traction for now but the
longer-term outlook for risk assets, buffeted repeatedly by
trade concerns, remained shaky.
"There is still a large element of uncertainty regarding the
U.S.-China trade dispute. It remains difficult to foresee a
resolution, and this will continue to weigh on equity market
sentiment," said Shusuke Yamada, chief Japan FX and equity
strategist at Bank Of America Merrill Lynch.
"Apart from the trade war, the equity markets also have to
keep an eye on Brexit proceedings, monetary policy of key
players such as the European Central Bank and moves in the
Chinese yuan."
In currencies, the dollar held gains made the previous day
thanks to a rebound in U.S. Treasury yields.
The dollar index .DXY versus a basket of six major
currencies stood at 98.027, having risen about 0.5% overnight.
The benchmark 10-year U.S. Treasury yield US10YT=RR was at
1.530%, pulled back from a three-year low of 1.443% reached on
Monday on the back of wide-spread risk aversion.
The greenback traded little changed at 105.990 yen JPY=
following a 0.7% gain on Monday, when it had brushed an
eight-month low of 104.460.
The euro EUR= was effectively flat at $1.1103 after losing
0.4% on Monday.
The Australian dollar AUD=D4 , sensitive to developments in
China, Australia's largest trading partner, was steady at
$0.6773 following a gain of 0.3% the previous day.
Crude oil prices recovered some ground after significant
losses the previous day on the prospect of crude from Iran,
currently facing sanctions, hitting the market.
Brent crude futures LCOc1 were up 0.4% at $58.94 per
barrel after losing 1% the previous day.
Oil prices fell on Monday after French President Emmanuel
Macron said preparations were underway for a meeting between
Iranian President Hassan Rouhani and President Trump in the
coming weeks to find a solution to a nuclear standoff.
(Editing by Sam Holmes)