GLOBAL MARKETS-Bond yields, stock prices supported ahead of central bank meetings

* Value-oriented shares in U.S. suddenly in favour
* Investors unwind their positions ahead of central bank
meets
* Bond yields rise, U.S. 10-year yield up 10 bps on Tues
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano
TOKYO, Sept 11 (Reuters) - Asian stock markets held firm and
bond yields rose on Wednesday as hopes of diminishing U.S.-China
tensions and reduced risk of no-deal Brexit prompted investors
to take profit in risk-off trade ahead of key central bank
policy meetings.
In early trade, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS was up 0.10% while Japan's Nikkei
.N225 rose 0.32%.
On Wall Street, the S&P 500 ended little changed as a rally
in energy and industrial shares countered a drop in the
technology and real-estate sectors with investors favouring
value over growth.
That represented a major reversal after many months of
outperformance by growth shares such as tech shares.
"The sudden jump in value-oriented shares in the U.S. and
elsewhere has all the hallmarks of position unwinding by major
hedge funds," said Norihiro Fujito, chief investment strategist
at Mitsubishi UFJ Morgan Stanley Securities.
"Such unwinding could continue for a few days but will
likely end by the Fed's policy meeting."
Such reversals began last week after the announcement of
U.S.-China trade talks in October and as the British parliament
moved to prevent Prime Minister Boris Johnson from crashing the
UK out of the European Union without a deal.
Position unwinding was also apparent in bond markets ahead
of key central bank policy announcements including the European
Central Bank on Thursday and the U.S. Federal Reserve next week.
U.S. bond yields jumped on Wednesday, with the 10-year
Treasuries yield rising more than 10 basis points to a one-month
high of 1.745% US10YT=RR .
It last stood at 1.726% in Asia. Japanese 10-year JGB yield
rose 1.5 basis point to minus 0.215% JP10YTN=JBTC while the
Australian 10-year yield rose more than 5 basis points to
six-week high of 1.142% AU10YT=RR .
In Europe, Germany's 30-year benchmark bond yield
DE30YT=RR briefly broke into positive territory for the first
time since Aug. 5.
Investors had bought bonds for many weeks on expectations
that the ECB will dole out stimulus, with a cut in interest
rates of at least 10 basis points fully priced in.
Some traders also expect more measures including a deeper
interest rate cut and a restart of its asset purchase programme.
The U.S. Federal Reserve is also widely expected deliver an
interest rate cut next week.
Germany also signalled its readiness for relaxing its
staunch opposition to deficit spending to support the economy,
leading to speculation Berlin could issue more debt and curbing
appetite for German bonds.
Finance Minister Olaf Scholz said on Tuesday the country can
counter a possible economic crisis by injecting billions of
euros into the economy. In the currency market, the dollar traded at 107.58 yen
JPY= , having hit a six-week high of 107.63 earlier on
Wednesday.
The euro stood little changed at $1.10485 EUR= , while the
British pound stood at $1.2358 GBP=D4 , near its six-week high
of $1.2385 hit earlier in the week.
Oil prices held firm near their highest levels in six weeks
despite small losses on Tuesday after U.S. President Donald
Trump fired national security adviser John Bolton.
Departure of Bolton, who took a strident stance against
Iran, raised speculation of improvement in U.S.-Iran relations
and an eventual return of Iranian crude exports to the market.
Still, the market was underpinned by Saudi Arabia's new
energy minister's assurances of continued output cuts by the
Organization of the Petroleum Exporting Countries.
In addition, geopolitical tensions in the Middle East are
nowhere near subsiding after Israeli Prime Minister Benjamin
Netanyahu announced his intention to annex a large swathe of the
occupied West Bank, a move condemned by Arab League foreign
ministers. Brent crude LCOc1 futures rose 0.82% to $62.89 a barrel
while U.S. West Texas Intermediate (WTI) crude CLc1 gained
0.96% to $57.95 per barrel.

(Editing by Stephen Coates)