* China rally extends for eighth session, yuan soars
* Gold steady above $1,800/oz
* Investors hope for positive outlook from U.S. firms on earnings
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook
SINGAPORE, July 9 (Reuters) - Surging Chinese stocks led Asia's equity markets higher on Thursday, as investors looked past Sino-U.S. tension and renewed coronavirus lockdowns and hoped stimulus washing through the world economy finds its way to company earnings.
Asia's investors are riding high after a front-page editorial in Monday's China Securities Journal extolling market fundamentals was seen as official encouragement to buy stocks.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.8% and touched a 20-week high. The Shanghai Composite .SSEC turned in its longest winning streak in more than two years and is up 16% in eight sessions. .SS
European futures point to gains from London to Frankfurt, with FTSE futures FFIc1 up 0.5% and Germany's DAX futures FDXc1 up 1.2%, while U.S. stock futures ESc1 fell 0.1%.
The yuan CNY= rose to a four-month high and the risk-sensitive New Zealand dollar NZD=D3 hit its highest since January. FRX/
"Broadly speaking, the Chinese economy is coping better not only with a recovery but also in dealing with the potential of a second wave (of infections)," said National Australia Bank FX strategist Rodrigo Catril.
"Rightly or wrongly, that market is liking the idea that the yuan can strengthen on the back of equity inflows."
China's factory gate prices fell for a fifth straight month in June but signs of a pickup in some parts of the sector suggest a slow but steady recovery remains intact. Bank's chief international strategist, Alan Ruskin, said the yuan enjoyed the "perfect combination" of tight monetary policy, yield advantage and equity demand.
In any case, its rally was not to be derailed by growing pressure from the West over China's tightening grip on Hong Kong, nor was sentiment dented by surging U.S. virus cases and a fresh lockdown of 5 million Australians in Melbourne.
Australia's benchmark ASX 200 index .AXJO rose 1% and Japan's Nikkei .N225 rose 0.6%. The Australian dollar AUD=D3 rose 0.2% to $0.6995, but - perhaps indicating a cap on exuberance - it was unable to break past resistance at $0.70.
U.S. Treasuries were not sold in to the rally either, and nor were the safe havens of gold or the Japanese yen. The yield on benchmark U.S. 10-year Treasuries US10YT=RR remained under pressure at 0.6545% and gold XAU= sat at $1,810.73 an ounce.
EARNINGS AHEAD
The U.S. earnings season looms with investor hopes high but warning signals flashing.
Federal Reserve officials raised fresh doubts on Wednesday about the durability of the rebound. United States has also posted its largest number of daily new infections since the outbreak began and global tensions are on the rise. on Thursday suspended an extradition agreement with Hong Kong and urged its citizens to reconsider the need to remain there if they are concerned about new national security laws that extend Beijing's power in the city.
China's top diplomat said on Thursday that China-U.S. relations face the most serious challenges since diplomatic ties were established. jobs data due at 1230 GMT will offer the next checkup on the recovery's progress, followed by results next Tuesday from J.P. Morgan JPM.N , Citigroup (NYSE:C) C.N and Wells Fargo (NYSE:WFC) WFC.N ahead of Microsoft MSFT.O and Netflix NFLX.O on Thursday.
"Earnings season is upon us, and we really want to see what it looks like," said Jun Bei Liu, a portfolio manager at Australia's Tribeca Investment Partners.
The focus will be on the outlook as well as on understanding how deeply stimulus efforts have flowed through the real economy, she said.
Commodities seem to be laying a bet each way. Brent crude LCOc1 was flat at $43.28 per barrel and U.S. crude fell 0.2% to $40.82 per barrel as concerns about oversupply weigh. O/R
But Shanghai copper hit a 16-month high on supply worries in top producer Chile.