TOKYO, Aug 28 ― Asian shares eked out meagre gains today, as higher Wall Street futures provided some relief for investors after an overnight US selloff, though deeper worries about the global economy are likely to keep a lid on sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.03 per cent, Japan's Nikkei rose 0.04 per cent and Australia's shares rose 0.07 per cent.

The US yield curve inversion deepened yesterday to levels not seen since 2007, which sent Wall Street stocks lower. The S&P 500 fell 0.33 per cent.

Gold, which is bought as a safe haven during times of economic uncertainty, traded close to a six-year high.

Advertisement

“Bonds are rallying and there is limited upside for stocks right now,” said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo.

“But I don't want to give up on equities just yet. The US Federal Reserve and officials in other countries simply have to do more to stimulate their economies, which will eventually prevent the bottom from falling out.”

US stock futures were 0.14 per cent higher, which helped ease investors' nerves in Asian trading, but there were still plenty of reasons to be concerned.

Advertisement

Investors will focus on how Chinese shares open after China late yesterday unveiled measures to boost consumption.

A trade dispute between the United States and China is now in its second year and is placing increasing strain on the global economy, forcing policy makers to respond with interest rate cuts and stimulus measures to bolster growth.

A bond yield curve inverts when long-term yields trade below short-term yields and is commonly considered a signal of an impending economic recession.

The yield on benchmark 10-year Treasuries stood at 1.4744 per cent, compared with the two-year yield of 1.5159 per cent. The yield curve inversion is the deepest since May 2007, when the US subprime financial crisis started to unfold.

Yields on 30-year Treasuries stood at 1.9554 per cent, below 3-month T-bill yields of 1.9951 per cent, which some traders say is an even more bearish signal.

Spot gold was unchanged in Asia at US$1,542.25 (RM6,485.85) per ounce, but still close to a six-year high.

The dollar was little changed at ¥105.67 after falling 0.3 per cent yesterday.

Investors are also focused on September 1, when the first stage of US tariffs on US$300 billion worth of Chinese goods is scheduled to go into effect. In response, China has unveiled tariffs on US products set to go into effect the same day.

US crude ticked up 1.17 per cent to US$55.57 a barrel, supported by expectations of a drawdown in US crude inventories. ― Reuters