* Asia stocks steady on perceived easing in trade tensions
* Soft U.S., China economic data underscore slowdown
* U.S. bond yields dip, 2-yr yields at 15-month low
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano
TOKYO, May 16 (Reuters) - Asian shares steadied on Thursday
on news that U.S. President Donald Trump is planning to delay
tariffs on auto imports, providing much needed relief to markets
hit by a flare-up in trade tensions and on weak U.S. and and
Chinese economic data.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was flat, with both Australia and South Korea
little changed.
Japan's Nikkei .N225 fell 0.6%, with banks hurt by weak
earnings.
On Wednesday, Wall Street shares extended their rebound,
with the S&P 500 .SPX gaining 0.58% and the MSCI's broadest
gauge of world stocks .MIWD00000PUS bouncing back from a
two-month low hit on Tuesday.
The uptick came after three administration officials told
Reuters on Wednesday that Trump is expected to delay a decision
on tariffs on imported cars and parts by up to six months.
Hyundai Motor 005380.KS jumped more than 5% but reaction
in Japanese carmaker shares .ITEQP.T was muted.
Also on Wednesday, less than a week after Washington slapped
higher tariffs on $250 billion imports from China, U.S. Treasury
Secretary Steven Mnuchin said he will likely travel to Beijing
soon to continue negotiations with Chinese counterparts.
The positive trade developments lifted risk sentiment that
had been dampened earlier in the session by weak economic data.
China reported surprisingly weaker growth in retail sales
and industrial output for April, with overall retail sales
posting the slowest increase since May 2003. In the U.S., retail sales unexpectedly fell in April as
households cut back on purchases of motor vehicles and a range
of other goods, while industrial production fell 0.5% in April,
the third drop this year.
That prompted the Atlanta Federal Reserve's GDPNow forecast
model to cut the second-quarter growth estimate to 1.1% from
1.6% estimated on May 9. Weak data underpinned U.S. bond prices, pushing down their
yields further.
The 10-year U.S. Treasuries yield eased to 2.376 percent
US10YT=RR , near its 15-month low of 2.340 percent touched on
March 28.
The two-year notes yield hit a 15-month low of 2.139 percent
on Wednesday and last stood at 2.155 percent.
Fed funds rate futures 0#FF: are fully pricing in a rate
cut by the end of this year and more than a 50 percent chance of
a move by September.
"The markets are inching step by step in pricing in a rate
cut. That is a sea change from a year ago when the consensus was
three to four rate hikes a year," said Akira Takei, bond fund
manager at Asset Management One.
Oil prices edged up on the prospect of mounting tensions in
the Middle East hitting global supplies despite an unexpected
build in U.S. crude inventories.
Brent crude LCOc1 rose 0.7% to $72.25 a barrel, while U.S.
West Texas Intermediate (WTI) crude CLc1 fetched $62.45 a
barrel, up 0.7%.
The United States pulled staff from its embassy in Baghdad
on Wednesday out of apparent concern about perceived threats
from Iran.
The sabotage of the tankers, for which no one has claimed
responsibility, and Saudi Arabia's announcement on Tuesday that
armed drones hit two of its oil pumping stations have raised
concerns Washington and Tehran may be inching toward conflict.
(Editing by Shri Navaratnam)