Tokyo - Asian shares edged higher in choppy trade on Wednesday and European stocks were also poised to gain, but the euro slipped as worries over contagion from Spain's banking sector were heightened after the country's bond yields hit record peaks.
Spreadbetters predicted major European markets would open as much as 0.7% higher. But US stock futures were down 0.2%.
MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.3%, after earlier falling as much as 0.2%.
The index has since Monday held above its 21-day moving average, a short-term technical level closely followed by hedge funds and investment banks. But it faces firm resistance at 401.50, where rebound attempts failed twice in late May.
Australian shares reversed course to fall 0.3%, leading declines in Asia.
"I'm not even thinking about upside at the moment. It's more a case of switching ... out of riskier stocks into more defensive names," said Phillip Weinberg, a dealer at Karara Capital in Melbourne.
"You're probably better off holding cash at the moment and waiting to see how things play out."
Japan's Nikkei average rose 0.8%, helped by Wall Street's 1% gain overnight.
Asset prices have see-sawed as optimism and disappointment have taken turns by the day, reflecting a high level of unease in markets about whether contagion from Spain's banking crisis can be contained and whether Greece's June 17 election will see it stay in the eurozone.
Risk appetite has been curbed by a lack of detail in a loan agreement to help Spain's banks recapitalise, and concerns that the scheme could further aggravate Madrid's fast-rising public debts and force it to seek bailouts similar to those for Greece, Ireland and Portugal.
Spain's 10-year bond yield on Tuesday rose to 6.86%, surpassing peaks seen in November last year to mark its highest since the 1999 launch of the euro.
That capped the euro, which traded down 0.1% at $1.2493, nearing Tuesday's low of $1.24428. European shares ended higher and the euro came off lows on Tuesday.
"There was nothing substantial in the recovery in sentiment, and it appears only to be supported by hopes Europeans will take more measures to ensure the Spanish aid will work while seeking to buy time for Greece," said Yuji Saito, director of foreign exchange at Credit Agricole Bank in Tokyo.
"There might also be some hopes the G20 will put pressure on Europe. Given so much uncertainty, players are quick to take profits whenever there is a rebound."
Despite a huge number of positions betting on the euro's further decline, the currency's downside has been limited by options lined up around $1.25 as well as repatriation ahead of the half-year end in June by European financial institutions and companies, Saito said.
Speaking ahead of a June 18-19 summit of Group of 20 leaders in Mexico, Mexican President Felipe Calderon said on Tuesday European powers must quickly finalise plans to support Spanish banks, and said he expected important progress to be made in resolving the two-and-a-half year-long crisis.
Europeans, on the other hand, did little to soothe investor jitters, with Austria's finance minister saying Italy may need a financial rescue because of its high borrowing costs, while the Dutch finance minister said the eurozone was "still far from stable".
Just as 10-year sovereign yields surpassing 7% is seen as unsustainable for an economy, analysts and traders eyed a rise in premiums investors ask on bonds issued by indebted eurozone countries to above 500 basis points over German benchmarks as a prelude for seeking global bailouts.
At Tuesday's close, the spread between Spanish and German 10-year bonds stood around 540 bps, while that for Italy was around 474 bps.
It took 10 days of Spanish/German spreads exceeding 500 bps before Madrid obtained a rescue, 16 days for Greek/German spreads for Athens to get its first bailout, 24 days for Ireland and 34 days for Portugal, noted Ashraf Laidi, chief global strategist at City Index.
"The next fear metric will be in Italian bonds - 6.60% territory in 10-year yields and 5% bar in the Italian-German 10-year spread," he said.
US crude fell 0.3% to $83.07 a barrel, after hitting a 2012 low of $81.07 in intraday trading on Tuesday, its lowest since October 6. Brent inched up 0.1% to $97.24 a barrel.
The cost of insuring against corporate and sovereign defaults in Asia eased slightly on Wednesday, with the spread on the iTraxx Asia ex-Japan investment-grade index narrowing by 3 basis points.