Asian stocks edge up

TOKYO, Aug 28 (Reuters): Asian shares eked out cautious gains on Wednesday, as higher Wall Street futures provided some relief after an overnight US selloff, though deeper worries about the global economy and trade continue to weigh on market sentiment.

Japan's Nikkei rose 0.21 per cent, Australia's shares climbed 0.41 per cent while Korea's KOSPI was up 0.76 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.03 per cent, held back by weaker Chinese markets.

Oil prices rose in Asia for a second day of gains after an industry report showed US stockpiles fell more than expected.

Gold prices fell in a tentative sign of easing risk aversion, but a deep inversion in the US Treasury yield curve served as a reminder that some investors are still concerned about economic growth.

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 policymakers to respond with interest rate cuts and stimulus measures to bolster growth.

"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."

South Korea stocks were on course for their biggest daily increase in a week as investors hunted for bargains after shares were sold due to worries about weighting changes in the MSCI index.

China unveiled measures late on Tuesday to help boost consumption, including the possible removal of restrictions on auto purchases, as growth in the world's second-biggest economy falters.

Chinese shares initially opened higher on Wednesday but then reversed course to trade 0.27 per cent lower, showing there are still some concerns about economic growth.

Shares in Hong Kong swung between gains and losses as increasingly violent protests against China's "one country, two systems" rule of the former British colony hurt sentiment.

Investors are also focused on Sept. 1, when the first stage of US tariffs on $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.