* MSCI AxJ up 0.5% after Nasdaq jumped 2.7% overnight
* Currency markets await ECB
* Oil prices back under pressure amid demand fears
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook and Jessica DiNapoli
SINGAPORE/NEW YORK, Sept 10 (Reuters) - Asia's stock markets snapped their longest losing streak since February on Thursday and rose following a bounce on Wall Street, though subdued trade in currency, commodity and bond markets suggested investors remain cautious about the outlook.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained half a percent, lifting away from a one-month low made on Wednesday.
Japan's Nikkei .N225 rose 0.5% and markets in Shanghai .SSEC and Hong Kong .HSI opened higher. But pressure returned to the oil price on worries about soft demand, a harbinger of weaker global growth. O/R
An overnight rally in riskier currencies also paused, as foreign exchange traders look for the European Central Bank's tone at its meeting later on Thursday to guide the next move for the euro, dollar and the broader market. FRX/
S&P 500 futures ESc1 and Nasdaq 100 futures NQc1 each fell 0.4% in Asia.
Indonesia's main stock index .JKSE dropped 4% to its lowest in more than a month on news the country's capital Jakarta will reinstate social distancing restrictions due to a rise in coronavirus infections. price action suggests that strong buying interest remains on market corrections given the backdrop of ample central bank liquidity," economists Liz Kendall and Brian Martin at ANZ Bank said in a note.
"However, with some volatility having returned to markets it's too soon to say whether the rout is over, or whether last night's recovery is simply a pause," the added.
Overnight on Wall Street the tech-heavy Nasdaq .IXIC posted its steepest rise in more than four months, gaining 2.7%, to halt a three-session selldown that whacked tech stocks. .N
Stay-at-home companies such as Facebook Inc FB.O and Google-parent Alphabet Inc GOOGL.O climbed, while electric-car maker Tesla Inc TSLA.O rebounded nearly 11%, a day after suffering its biggest ever percentage drop. Dow .DJI rose 1.6% and the S&P 500 .SPX 2% and bonds sold off in concert with the rally. The yield on benchmark 10-year U.S. government debt US10YT=RR rose about 2 basis points to 0.71% overnight, with soft demand at a $35 billion auction.
That retraced a little bit to sit at 0.6951% in Asia. US/
MARKET DISLOCATION
The rebound in equities has steadied a sharp selloff that has highlighted the fragility of a rally that has carried the Nasdaq up 70% from March lows.
"It's a double-edged sword," said Oriano Lizza, sales trader at CMC Markets in Singapore, as retail investors who had great success on the way up now facing a tougher environment."
"This is where there's a lot of trepidation," he said. "The market structure is dislocated at the moment... with stimulus and (markets at) all time highs - there's no reference point."
The ECB policy decision at 1145 GMT, followed by a news conference from President Christine Lagarde at 1230 GMT, is the next focus for investors. in the week worries that the bank is concerned at the euro's recent rise had the euro under pressure.
However, hopes for an improving economic outlook, following a Bloomberg News report that ECB economic projections would be broadly steady since June, had the euro EUR=EBS on the front foot in Asia at $1.1817.
"The risk now is that the euro could lift after the ECB meeting, if that is the case and there is more confidence," said Commonwealth Bank of Australia currency analyst Kim Mundy, something that would pull other currencies higher on the dollar.
Elsewhere oil prices paring some overnight gains on worries about fuel demand after data showed U.S. crude stockpiles rose last week, rather than dropping as expected.
Brent crude futures LCOc1 fell 0.4% to $40.63 a barrel and U.S. crude futures CLc1 fell 0.6% to $37.82 a barrel. Gold XAU= was steady at $1,943 an ounce. GOL/
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