RPT-GLOBAL MARKETS-Asia stocks bounce back from 5-year low

* Asia stocks recover from 5-yr low, MSCI AXJ up 3 pct

* Traders cite various rumours, short-covering

* Yen slips from 13-yr peak vs pound, Treasuries drop (Repeats to additional subscribers with no change to text) (Adds European outlook, changes byline)

By Eric Burroughs

HONG KONG, Nov 21 (Reuters) - Asian stock markets rebounded from a five-year low on Friday as a variety of rumours such as China cutting interest rates later in the day prompted investors to cover short positions before the weekend.

The recovery in stocks pushed the yen down from a 13-year peak hit against the pound, knocked safe-haven government bonds lower and helped oil prices edge up from an early slide.

Traders also cited talk that the Federal Reserve could cut interest rates in an emergency move later in the day or global central banks could conduct another round of joint interest rate cuts in the face of renewed market volatility.

"Lots of rumours are flying around," said Markus Amman, director of global FX sales at HVB in Hong Kong.

The MSCI index of Asia-Pacific stocks outside Japan climbed 3.3 percent .MIAPJ0000PUS, having slid 3.2 percent earlier in the day to the lowest since October 2003.

Stock markets in Europe were expected to open more than 2 percent lower, but S&P 500 futures SPc1 were up 22 points, or 3 percent after a sharp fall on Wall Street the previous session.

The benchmark U.S. S&P 500 index .SPX fell 6.7 percent an 11-year low on Thursday, amid anxiety about the fate of corporate titans such as General Motors (GM.N), Ford Motor Company (F.N) and Citigroup (C.N).

Citigroup, not long ago the world's most valuable financial firm, is considering selling parts of itself or a merger of some kind, a source familiar with the matter told Reuters. [ID:nWEN0915]

Fears of a deep global economic recession have pummeled investor confidence all week, spurring more liquidation of assets like stocks and commodities and pushing the yield on 10-year U.S. Treasuries below 3 percent for the first time in a half-century.

South Korea's KOSPI led gains with a rise of almost 6 percent, while Japan's Nikkei average .N225 added nearly 3 percent.

The yen slipped after hitting a 13-year high against the pound GBPJPY=R and pushing back near an all-time peak struck against the Australian dollar AUDJPY=R last month.

The yen tends to serve as a weather vane for risk taking via its role in the carry trade, in which the low-yielding Japanese currency is used as a cheap source of funds to buy higher-yielding currencies.