GLOBAL MARKETS-Gains for Asian shares capped by fresh trade jitters, China stocks fall

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Yuan stabilizes, Chinese stocks fall after soft data
* European stock futures point to tad higher opening
* U.S. Treasury yields rise; Gold holds near 6-year high

By Tomo Uetake
TOKYO, Aug 9 (Reuters) - Asian shares inched up on Friday,
helped by Wall Street's rally, but fresh concerns about
Sino-U.S. trade ties capped gains in the region.
Weighing on risk appetite was a report from Bloomberg that
Washington is delaying a decision about licenses for U.S. firms
to restart trade with Huawei Technologies HWT.UL . That sent U.S. stock futures ESc1 down as much as 0.6% in
Asian trade.
Pan-European Euro Stoxx 50 futures STXEc1 fell 0.2% in
late Asian trade, indicating that European cash share markets
will open a tad lower on Friday.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was 0.2% higher but on track to lose 2.3% for
the week.
Japan's Nikkei average .N225 gained 0.4%, while Australian
stocks .AXJO added 0.3% and South Korean shares .KOSPI
climbed 1.1%.
Early gains by Chinese stocks were erased after data showed
the country's producer prices fell for the first time in three
years in July, while a selloff in high-profile tech firms
dampened already fragile sentiment. The benchmark Shanghai Composite .SSEC and the blue-chip
CSI300 .CSI300 were down 0.8% and 1.0%, respectively, while
Hong Kong's Hang Seng .HSI eased 0.2%.
On Wall Street on Thursday, the S&P 500 .SPX surged 1.9% -
its largest one-day gain in about two months- while the Dow
.DJI and the Nasdaq .IXIC also advanced well more than 1%.
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However, optimism was dented by the Bloomberg report, which
added to concerns that deterioration in U.S.-China relations
could put additional strain on an already fragile global
economy.
"The news about Huawei triggered the rise in the yen," said
Junichi Ishikawa, senior foreign exchange strategist at IG
Securities. "This is a reminder that the U.S.-China trade
dispute remains a risk, and this risk is not receding."
The yen strengthened as much as 0.4% against the dollar to
105.70 yen on worries triggered by the report on Huawei.
U.S. data pointed to a robust labour market as the number of
Americans filing applications for unemployment benefits
unexpectedly fell last week, allaying some worries about a
recession and helping Treasury yields rise. Benchmark 10-year Treasury yield US10YT=RR closed 2.4
basis points higher at 1.715% after hitting 1.595% on Wednesday,
which was its lowest level since October 2016. It last quoted at
1.698%.
But others remained anxious on the outlook.
"Worries about trade war and currency policies will keep
market volatility elevated. Rate cuts by various central banks
this week underscored that the U.S-China confrontations are
problems not just for the two economies but for the entire
world," said Yoshinori Shigemi, global market strategist at
JPMorgan Asset Management.
"About a month ago, I had a feeling the global economy could
pick up later this year but now downside risks are deepening,
raising the chance of a recession."
The offshore yuan was stable versus the dollar even after
China's central bank set the yuan's daily midpoint CNY=PBOC at
7.0136 per dollar, its weakest level since April 2, 2008.
The currency fetched 7.0505 per dollar in onshore trade
CNY=CFXS , while offshore yuan CNH=D4 traded at 7.0767,
steady on the day.
But traders continued to pay close attention to U.S.-China
trade headlines to figure out Beijing and Washington's next
moves in their bruising tariff tussle.
"The U.S.-China trade war is very serious. My hope is that
the United States and China can find enough to agree on so that
they can contain the push-and-shove that occurs when the
emerging power meets the dominant power. The alternative is not
pleasant," said veteran investor Dan Fuss, vice chairman of
Loomis Sayles.
The dollar index .DXY , which measures the greenback versus
a basket of six major currencies, was little changed at 97.541
but on track for its biggest weekly decline since late June.
Sterling briefly hit its two-year low against the euro
overnight after the Financial Times reported that Prime Minister
Boris Johnson was preparing to hold an election in the days
following Brexit.
The pound was last quoted at 92.21 pence per euro EURGBP= ,
down 0.1% on the day, and was traded against the dollar at
$1.2138 GBP=D4 , steady on the day.
In commodity markets, oil prices on Friday gave up some the
previous day's stellar gains, but expectations of more
production cuts by OPEC were expected the underpin prices. O/R
Brent crude LCOc1 retreated 0.1% to $57.32 per barrel and
U.S. West Texas Intermediate (WTI) CLc1 crude eased 0.1% to
$52.50.
Spot gold XAU= held near a more than six-year peak touched
Wednesday, with rising 0.5% to $1,507.66 an ounce as investors
continued to seek the safety of the precious metal.