In This Article:
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* China blue chips gain 2%, PBOC adds more loans
* Nikkei slips as Japan reports record drop in GDP
* Rise in long-term U.S. yields offers some support to dollar
* Gold soft after suffering worst week since March
By Wayne Cole
SYDNEY, Aug 17 (Reuters) - Asian shares firmed toward recent peaks on Monday as Chinese markets swung higher, while investors waited to see if the recent sell-off in longer-dated U.S. Treasuries would extend and maybe take some pressure off the beleaguered dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5% to 565.74, moving nearer to the January top of 574.52.
Chinese blue chips led the way with gains of 2.0%, with the country's central bank providing more medium term loans to the financial system.
Japan's Nikkei dipped 0.6% after touching a six-month peak on Friday, as the country suffered its biggest economic contraction on record in the second quarter.
E-Mini futures for the S&P 500 firmed 0.39% to be just below the record close of 3,386.15.
The U.S. second-quarter earnings season wraps up with the major retailers reporting this week, including Walmart Inc , Home Depot Inc and Kohls Corp.
Politics will be a feature as the Democratic National Convention kicks off the 2020 presidential election season.
Sino-U.S. relations remain a sticking point with U.S. President Donald Trump on Saturday saying he could exert pressure on more Chinese companies such as technology giant Alibaba after he moved to ban TikTok.
U.S. crude oil shipments to China will rise sharply in coming weeks, as the world's two top economies gear up to review their January deal after a prolonged trade war.
News that the scheduled review of the U.S.-China Phase-One trade deal over the weekend had been postponed indefinitely didn’t elicit much of a reaction.
The highlight of the economic calendar will be the release of the minutes from the Federal Reserve's last policy meeting.
"Market participants will be looking for insight into the details and exact timing of when the Fed's Monetary Policy Review will be completed, and also for more clarity with respect to the potential timing and structure of any changes to forward guidance," noted analysts at NatWest Markets.
Speculation is rife the Fed will adapt an average inflation target, which would seek to push inflation above 2% for some time to make up for the years it has run below it.
That combined with massive new debt supply caused a sharp increase in longer-term bond yields last week with 30-year yields rising 21 basis points as the curve steepened.