* News of progress in U.S.-China talks lifts mood
* S&P 500 could make biggest quarterly gain since 2009
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano
TOKYO, March 29 (Reuters) - Asian shares posted narrow gains on Friday on revived hopes of progress in U.S.-China trade talks, while global bond yields moved higher after a prolonged slide on worries about the economic outlook.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.1 percent while Japan's Nikkei .N225 rose 1.0 percent.
The S&P 500 .SPX on Thursday gained 0.36 percent and the Nasdaq Composite .IXIC added 0.34 percent.
Despite recent market turbulence, the S&P 500 has gained 12.3 percent so far this quarter, which would mark its best quarterly performance since 2009 if sustained.
The mood was brightened after U.S. officials said China has made proposals in trade talks with the United States on a range of issues that go further than it has before, including on forced technology transfer. 10-year U.S. bond yield edged up to 2.391 percent US10YT=RR from a 15-month low of 2.352 percent touched on Thursday after an almost relentless fall since the Fed's dovish tone last week had investors more worried about the economic outlook.
Investors have been on heightened alert since the yield on the 10-year note fell below the three-month U.S. Treasury yield US3MT=RR last Friday, an inversion of the yield curve that is widely seen as an indicator of a recession.
Data published on Thursday showed U.S. economic growth was slower than initially thought in the fourth quarter, with GDP growth revised down to 2.2 percent from an earlier reading of 2.6 percent. economy is softening and will soften for now. But whether the U.S. is entering a recession is still debatable," said Mutsumi Kagawa, chief global strategist at Rakuten Securities.
"Lower bond yields will support the economy while (U.S. President Donald) Trump is likely to take steps to support the economy as he seeks re-election. The economy could pick up later this year," he said.
In the currency market, the euro stood at $1.1233 EUR= after having slid to a three-week low of $1.1214 as speculation grew that the European Central Bank will introduce a tiered deposit rate. yen was steadier at 110.64 to the dollar JPY= , off Monday's 1-1/2 month high of 109.70.
In a sign of simmering concerns about political and economic uncertainties, the Swiss franc has been well-bid, hitting a 20-month high of 1.11665 to the euro EURCHF= .
The Turkish lira TRY= licked its wounds after a 4 percent plunge on Thursday. President Tayyip Erdogan blamed the currency's weakness on attacks by the West ahead of nationwide local elections on Sunday. severe move was seen in palladium XPD= , which dropped 6.6 percent on Thursday and has lost one-sixth of its value from last week's peak on concerns that an economic slowdown could dent demand.
The British pound dropped to $1.3050 GBP=D4 as the prospect of a swift agreement on Brexit faded with the British parliament yet again failing to agree on a way forward.
Oil futures were quickly recovering from the damage caused by Trump's call for OPEC to boost crude output in an effort to lower prices.
U.S. crude futures CLc1 traded at $59.54 per barrel, up 0.4 percent on the day and recovering from Thursday's low of $58.20.