* Asia stocks edge up 0.4 pct, tech gives a boost
* RBA keeps rates steady, Aussie edges up
* Yen holds gains as higher-yielding currencies cut
* JGBs extend long rally, yields pushed to 3-mth low
By Eric Burroughs
HONG KONG, July 7 (Reuters) - Asian stocks edged up
slightly on Tuesday but struggled after a slide the previous
day, while the yen held gains against higher-yielding
currencies as investors doubt the speed of the global economy's
recovery.
A bleak U.S. jobs report last week has prompted portfolio
managers to reassess how quickly economies around the world can
return to growth after the deep recession, spurring a pull-back
in shares and currencies such as the Australian dollar.
"Last week's U.S. employment numbers were a hint that
perhaps the market had become over-optimistic," said Takahiko
Murai, general manager of equities at Nozomi Securities in
Tokyo.
But regional markets have held up as some early news on
quarterly earnings showed technology companies faring well.
Taiwan's benchmark TAIEX index <> gained 1 percent,
thanks to a 3.3 percent jump in shares of smartphone maker HTC
<2498.TW> after the company reported a better-than-expected
second-quarter profit.
South Korea's KOSPI <> edged up 0.4 percent after
Samsung Electronics <005930.KS>, the world's top maker of
memory chips and flat screen TVs, forecast second-quarter
earnings well above forecasts, giving the broader market a
boost. Samsung's shares were up more than 8 percent in the past
two days.
The yen held near a five-week peak against sterling and the
New Zealand dollar as market players have cut holdings of
currencies that have surged along with stocks. U.S. crude oil
prices were up 15 cents a barrel at $64.20 <CLc1> while gold
prices hovered below $930 <AUX=> per ounce.
In Japan, investors have poured cash into government bonds
on bets that the economy's recovery from recession will be an
extended one that could lead to a long stretch of deflation,
pushing benchmark yields to a three-month low.
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> edged up 0.4 percent, with technology shares
the biggest gainers.
Japan's Nikkei share average <> dipped 0.3 percent as
a stronger yen hit exporter shares, while the Shanghai
Composite <> shed 0.7 percent after having reached a
13-month high the previous day.
China's economic resilience and splurge of bank lending to
boost growth has fuelled the 70 percent rally in the Shanghai
Composite so far this year.
Market reaction was limited so far as hundreds of Uighur
protesters clashed with Chinese anti-riot police in the capital
of China's Muslim region of Xinjiang on Tuesday, two days after
ethnic unrest left 156 dead and more than 800 injured.
[]
Indian markets steadied after a slide the previous day when
the government's big-spending budget for the coming fiscal year
was viewed as disappointing. []
The SENSEX <> edged up 0.8 percent after a 6 percent
tumble and the rupee <INR=IN> inched higher.
But yields on five-year federal bonds <IN060714G=CC> jumped
to 6.49 percent, taking the two-day rise to 25 basis points on
worries about how the market will absorb the bigger issuance to
pay for the spending that will boost the deficit to 6.8 percent
of GDP.
DOLLAR STEADIES
The dollar was mostly steady and has held its ground in the
past few weeks as riskier assets have stumbled, with the U.S.
currency favoured as a safe haven when market players strike a
cautious footing.
The dollar was little changed at 95.30 yen <JPY=>, while
the euro drifted sideways at $1.3960 <EUR=>.
The New Zealand dollar, which has surged along with its
Australian counterpart despite a much weaker economy and record
low interest rates, was steady at 60.50 yen <NZDJPY=R> after
hitting a five-week low of 59.30 yen on Monday.
The Australian dollar, the biggest gainer among major
currencies this year as investors crept back into
higher-yielding, higher-risk assets, edged up slightly to
$0.7967 <AUD=D4> after the Reserve Bank of Australia sounded an
optimistic note in keeping rates on hold at 3 percent.
Australian short-term rates are among the highest
short-term rates of developed economies and one of the reasons
for the Aussie's nearly 13 percent surge against the U.S.
dollar this year.
"We think rates are on hold until towards the end of the
year, then we'll see the process of gradually increasing rates
from the end of this year, early next year," said Paul Brennan,
co-head of market economics at Citigroup in Sydney.
In government bonds, longer-term Japanese government bonds
extended their winning streak that has pushed yields sharply
lower.
The 10-year yield <JP10YTN=JBTC> edged up half a basis
point to 1.305 percent after falling to 1.295 percent, the
lowest since late March.
The drop in benchmark JGB yields was partly driven by
investors selling short-term notes for longer-term bonds,
unwinding bets that the yield curve would steepen as short-term
yields have become less attractive.
Two-year JGBs <JP2YTN=JBTC> were up half a basis point at
0.260 percent but were near their lowest levels in three
years.
(Additional reporting by Shinichi Saoshiro in Tokyo)
(Editing by Kazunori Takada)
