TOKYO (Reuters) – Asian shares eked out cautious gains on Wednesday, as higher Wall Street futures provided some relief after an overnight U.S. selloff, though deeper worries about the global economy and trade have kept a lid on sentiment.

FILE PHOTO: A passerby walks past in front of a stock quotation board outside a brokerage in Tokyo, Japan, May 10, 2019. REUTERS/Issei Kato

Japan’s Nikkei .N225 rose 0.15%, Australia’s shares climbed 0.13% while Korea’s KOSPI .KS11 was up 0.4%. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.06%, dragged lower by Chinese markets.

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

Gold prices fell in a tentative sign of easing risk aversion, but a deep inversion in the U.S. 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 policy makers 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 U.S. 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.”

U.S. stock futures ESc1 were 0.27% higher, which helped ease investors’ nerves in Asian trading after the S&P 500 .SPX fell 0.33% on Tuesday.

U.S. crude CLc1 rose 1.02% to $55.49 a barrel, supported by a drawdown in U.S. crude inventories.

Spot gold XAU= fell 0.5% to $1,538.00 per ounce, pulling back from a six-year high.

South Korea stocks .KS11 rose 0.5%, 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 .CSI300 initially opened higher on Wednesday but then reversed course to trade 0.56% lower, showing there are still some concerns about economic growth.

Shares in Hong Kong .HSI swung between gains and losses as increasingly violent protests against China’s “one country, two system” rule of the former British colony hurt sentiment.

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

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 US10YT=RR stood at 1.4761%, compared with the two-year yield US2YT=RR of 1.5159%. The yield curve inversion is the deepest since May 2007, when the U.S. subprime financial crisis started to unfold.

Yields on 30-year Treasuries stood at 1.9441%, below 3-month T-bill yields of 1.9951%, which some traders say is an even more bearish signal.

The dollar was little changed at 105.67 yen JPY=EBS after falling 0.3% on Tuesday.

Our Standards:The Thomson Reuters Trust Principles.

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