* MSCI Asia-Pacific index up 0.95 pct, Nikkei rises 1.3 pct
* Spreadbetters expect European stocks to open higher
* Trade salvos taken in stride, but trade war to remain key worry
* Premier Li: Beijing won’t engage in competitive yuan devaluation
* Long-term U.S. yields near 4-mth highs amid ebb in risk aversion
* World FX rates in 2018 tmsnrt.rs/2egbfVh
By Shinichi Saoshiro
TOKYO, Sept 19 (Reuters) - Asian stocks rose across the board on Wednesday as expectations that Beijing would implement stimulus to soften the economic blow from the Sino-U.S. trade war helped Chinese shares rally.
Spreadbetters expected European stocks to follow Asia’s lead and open higher, with Britain’s FTSE rising 0.15 percent, Germany’s DAX adding 0.2 percent and France’s CAC gaining 0.2 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.95 percent. Global equities have been on a steady footing this week as investors looked past the latest escalation in the U.S.-China trade feud, seen by some market participants as less severe than expected.
Hong Kong’s Hang Seng was up 1.3 percent and the Shanghai Composite Index rose more than 1 percent following a surge of 1.8 percent the previous day.
Economists at Bank of America Merrill Lynch wrote China was likely to step up policy easing as a buffer against the negative effects of higher tariffs.
“In our view, both monetary and fiscal easing will likely be rolled out to boost domestic demand and stabilise financial market sentiment,” they said.
Australian stocks added 0.5 percent, South Korea’s KOSPI was little changed and Japan’s Nikkei rose 1.3 percent.
The Trump administration said on Monday it will implement new tariffs of 10 percent on $200 billion of Chinese products on Sept. 24, with the tariffs to go up to 25 percent by the end of 2018.
China hit back, saying it will levy tariffs on about $60 billion worth of U.S. goods, as previously planned, but cut the tariff rates.
“There was relief as the United States set the initial tariffs at 10 percent, rather than the expected 25 percent, seen by some as a gesture that it was buying time for further negotiations,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
While global market reaction to the latest phase of the trade dispute has been relatively limited, the U.S.-China row was expected to heat up - a major worry for investors.
“In reaction to China’s latest retaliatory move, Trump is now highly likely to hit back by adding tariffs to another $267 billion of Chinese goods. The trade war will only escalate,” said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities in Tokyo.
“It remains to be seen if China holds back its anger and still holds negotiations with the United States. But if it opts not to, we’ll have to brace for the trade conflict dragging on into 2019.”
U.S. Treasury Secretary Steven Mnuchin last week invited top Chinese officials to a new round of talks, but speculation has risen that Beijing would decline to attend after Washington fired its latest trade salvo.
LONG-TERM U.S. YIELDS AT 4-MONTH HIGHS
China’s yuan was up 0.15 percent at 6.8504 per dollar in onshore trade, supported by comments from Premier Li Keqiang that Beijing would not weaken its currency to boost exports.
The Australian dollar, seen as a gauge of risk sentiment, stretched its overnight rally and rose to a near three-week peak of $0.7255.
Safe-haven U.S. Treasuries were sold and their yields rose on the back of improved investor risk appetite.
The benchmark 10-year Treasury yield stood at 3.049 percent after touching 3.059 percent overnight, its highest since May 23.
The rise in yields in turn propped up the dollar, which climbed to a two-month high of 112.43 yen.
The yen showed little reaction to the Bank of Japan’s well-anticipated decision on Wednesday to keep monetary policy steady.
The BOJ also maintained its 10-year Japanese government bond yield target at around zero percent.
The euro inched up 0.05 percent to $1.1674.
The pound shook off modest overnight losses and rose to $1.3175, its highest since July 26. Growing confidence that Britain and the European Union can secure an agreement has encouraged investors to buy sterling.
Crude oil prices consolidated after rallying the previous day on signs that OPEC would not be prepared to raise output to address shrinking supplies from Iran, and as Saudi Arabia signalled an informal target near current levels.
Brent crude futures was nearly flat at $79.04 a barrel following a rally of 1.25 percent on Tuesday. (Editing by Sam Holmes and Eric Meijer)