* MSCI Asia-Pacific index up 0.2%, Nikkei gains 1%
* Trump predicts trade deal after positive gestures by China
* Dollar lifted as safe-haven bond yields rise
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Shinichi Saoshiro
TOKYO, Aug 27 (Reuters) - Asian stocks tracked global peers higher on Tuesday while safe-haven bonds sold off as signs Sino-U.S. trade hostilities might be easing helped restore investor confidence after the previous session's rout.
Supporting the market mood, U.S. President Donald Trump on Monday flagged the possibility of a trade deal with China and said he believe Beijing was sincere in its desire to reach an agreement. Global markets had been roiled at the start of the week by new tariffs from the world's two largest economies. broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.2% after dropping 1.3% the previous day.
South Korea's KOSPI .KS11 added 0.8% and Japan's Nikkei .N225 rose 1%.
Equity markets may have found traction for now but the longer-term outlook for risk assets, buffeted repeatedly by trade concerns, remained shaky.
"There is still a large element of uncertainty regarding the U.S.-China trade dispute. It remains difficult to foresee a resolution, and this will continue to weigh on equity market sentiment," said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch.
"Apart from the trade war, the equity markets also have to keep an eye on Brexit proceedings, monetary policy of key players such as the European Central Bank and moves in the Chinese yuan."
In currencies, the dollar held gains made the previous day thanks to a rebound in U.S. Treasury yields.
The dollar index .DXY versus a basket of six major currencies stood at 98.027, having risen about 0.5% overnight.
The benchmark 10-year U.S. Treasury yield US10YT=RR was at 1.530%, pulled back from a three-year low of 1.443% reached on Monday on the back of wide-spread risk aversion.
The greenback traded little changed at 105.990 yen JPY= following a 0.7% gain on Monday, when it had brushed an eight-month low of 104.460.
The euro EUR= was effectively flat at $1.1103 after losing 0.4% on Monday.
The Australian dollar AUD=D4 , sensitive to developments in China, Australia's largest trading partner, was steady at $0.6773 following a gain of 0.3% the previous day.
Crude oil prices recovered some ground after significant losses the previous day on the prospect of crude from Iran, currently facing sanctions, hitting the market.
Brent crude futures LCOc1 were up 0.4% at $58.94 per barrel after losing 1% the previous day.
Oil prices fell on Monday after French President Emmanuel Macron said preparations were underway for a meeting between Iranian President Hassan Rouhani and President Trump in the coming weeks to find a solution to a nuclear standoff. by Sam Holmes)