GLOBAL MARKETS-Rising bond yields support value stocks ahead of c.bank meetings

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

By Hideyuki Sano and Tomo Uetake
TOKYO, Sept 11 (Reuters) - Bond yields climbed and stock
markets held steady on Wednesday, as hopes of easing U.S.-China
tensions and diminished risk of a no-deal Brexit prompted
traders to take profit before key central bank meetings.
Oil prices also firmed, underpinned by a big drop in U.S.
crude stockpiles, after slipping the previous day.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.4% to hit a fresh 5-1/2-week high.
Stock investors around the world continued to rotate into
value stocks, representing a major reversal after many months of
outperformance by growth shares such as tech companies.
Japan's Nikkei average .N225 climbed 0.9%, with the Topix
Value index .TOPXV jumping 1.9% whereas the Topix Growth
.TOPXG added 0.8%.
The Shanghai Composite .SSEC and the blue-chip CSI300
.CSI300 were almost flat and down 0.3%, respectively, while
Hong Kong's Hang Seng .HSI advanced 1.4%.
On Wall Street, the S&P 500 .SPX 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. .N/C
"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.
"Global bond markets are experiencing so-called momentum
crashes," said Masanari Takada, cross-asset strategist at Nomura
Securities, referring to a sudden and dramatic change in the
direction of asset prices.
"Trend-following CTAs (Commodity Trading Advisers) were
forced to square their long positions in major bond futures."
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 1.713% in Asian trade. The 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 a 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 Fed is also widely expected to 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 107.72 yen
JPY= , its highest in six weeks.
The euro stood little changed at $1.1050 EUR= , while the
British pound stood at $1.2351 GBP=D4 , near its six-week high
of $1.2385 hit earlier in the week.
Oil prices rose on Wednesday after an industry report showed
that crude stockpiles in the United States fell last week by
more than twice the amount that analysts had forecast. Prices
hovered near their strongest in six weeks despite small losses
on Tuesday after U.S. President Donald Trump fired national
security adviser John Bolton. The 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 0.7% to $62.80 a barrel
while U.S. West Texas Intermediate (WTI) crude CLc1 gained
0.8% to $57.84 per barrel.

(Editing by Stephen Coates and Jacqueline Wong)