* MSCI AxJ +0.2%; small gains in most regional markets
* Yen holds overnight gains, sits near 7wk peak
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook and John McCrank
SINGAPORE/NEW YORK, Sept 18 (Reuters) - Asian stocks inched
up on Friday, despite Wall Street declines, but struggled to
make deeper gains as worries about a faltering economic recovery
kept investors to the sidelines or seeking safer harbour in
assets such as the Japanese yen.
Oil prices held hefty overnight gains after OPEC flagged a
crackdown on member states that did not cut output and the
dollar was back to nursing losses after a brief journey higher
in the wake of Wednesday's Federal Reserve meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS looked set to end the week 1% ahead following
two weeks of tech-led losses. It rose 0.2% on the day while
market moves around the region were small.
Japan's Nikkei .N225 edged 0.1% higher. The ASX 200
.AXJO was flat, while stocks in Shanghai .SSEC , Hong Kong
.HSI and Seoul .KS11 rose between 0.2% and 0.4%.
U.S. stock futures were soft, with S&P 500 futures ESc1
down 0.2%, though Nasdaq 100 futures NQc1 turned positive by
the middle of the Asia session to trade 0.07% higher.
"The bigger picture issue is that markets, particularly
growth and tech stocks, have run very hard into the end of
August, which has left them somewhat vulnerable," said AMP
Capital chief economist Shane Oliver.
"There's uncertainty ahead of the U.S.
elections...China-U.S. tensions keep creeping in and on top of
that there's now uncertainty about how the recovery will proceed
from here in the absence of more stimulus in the U.S."
Overnight data showed recovery in the U.S. labour market
stalling and Wall Street indexes fell for a second straight
session amid disappointment that the Fed made no new monetary
easing commitments at its meeting this week.
The S&P 500 .SPX ended down 0.84%, and the Nasdaq .IXIC
dropped 1.27%. The Nasdaq's losses put the index down roughly
10% from a record high hit early in September and have it
tracking for its worst month since March.
"Unlike June, there is more fear of a deeper correction,"
analysts at Singapore's DBS Bank said in a note - since the
Nasdaq is below its 50-day moving average, a key technical
support level, and the U.S. election is fast approaching.
"The landscape is more challenging compared to three months
ago."
YEN RALLIES
In contrast to the Fed, the Bank of England made clear
overnight that it is open to further aggressive easing and is
looking closely at taking interest rates negative. That dovish tone sent the pound GBP= sharply lower before
it recovered as the dollar weakened in the New York session.
FRX/
The Japanese yen JPY= also rose overnight, shrugging off a
dovish-sounding Bank of Japan to ride a softer greenback and a
safety bid to a seven-week peak of 104.52 per dollar. It held
there on Friday, though some traders think it can rise further.
"The relative balance sheet trend between the Bank of Japan
and Fed can contribute to downside pressure on dollar/yen," said
Commonwealth Bank of Australia currency analyst Joe Capurso.
In commodity markets, oil held sharp gains after OPEC and
its allies said the group will take action on members that are
not complying with deep output cuts. O/R
Brent crude futures LCOc1 were last 0.2% firmer at $43.39
a barrel and U.S. crude futures CLc1 rose by the same margin
to $41.04 a barrel.
U.S. Treasuries picked up where they left off, with yields
on 10-year U.S. government debt US10YT=RR at 0.6838% after
concerns about possible inflation rises in the future helped
reverse a bond rally in overnight trade. US/
Later on Wednesday, U.S. consumer confidence data is due and
Fed board member James Bullard is to make a speech on the
challenges of the COVID-19 recovery, both at 1400 GMT.