* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* European stocks rise as risk appetite gradually returns
* Nikkei skids 1 pct as yen climbs to five-month peak
* Gold holds gains, US Treasury yields at lows for the year
* Growing unease over North Korea, Syria and Russia
* China’s Xi stresses peaceful solution in call with Trump
* Oil at highest in five weeks with eyes on OPEC
By Marc Jones
LONDON, April 12 (Reuters) - A break in alarming political news lifted European stocks on Wednesday and cooled a safe-haven rally that saw the yen and gold at five-month highs and top-rated government bond yields at their lowest this year.
The mood remained skittish though, tarnishing an otherwise brightening outlook for global economic growth, and meant that what looked set to be oil’s longest winning run since August went almost under the radar.
An early 0.5 percent rise for Europe’s STOXX 600 share index put it on course for its best day of the month. The rise in oil underpinned energy stocks while banks and carmakers also made ground.
“It is a modest rebound,” said Rabobank strategist Philip Marey. “We have discounted much of the news like the conflict between the Americans and the Russian on Syria and Trump’s tweets on North Korea, so maybe its time to move on.”
E-mini futures for the S&P 500 also turned firmer having spent the Asian session in the red. Japan’s Nikkei had slid just over 1 percent as a rising yen weighed on exporters’ shares.
MSCI’s broadest index of Asia-Pacific shares outside Japan saw a late rally though Shanghai closed down 0.4 percent as China reported a slight slowdown in producer price inflation.
In contrast, gold climbed as far as $1,280.30 at one stage, its highest since Nov. 10.
“A degree of uncertainty has found its way into previously seemingly bulletproof financial markets,” wrote analysts at ANZ.
“There is clearly some nervousness out there, with tensions around North Korea ratcheting higher and adding to an already heightened geopolitical environment. Global cyclical assets have not yet responded, but that can’t last.”
Chinese President Xi Jinping on Wednesday stressed the need for a peaceful solution for the Korean peninsula on a call with U.S President Donald Trump.
North Korea has warned of a nuclear attack on the United States at any sign of aggression as a U.S. Navy strike group steamed toward the Korean peninsula - a force Trump described as an “armada”. Japan’s navy also plans joint drills with the U.S. force, sources told Reuters.
Trump said in a Tweet that North Korea was “looking for trouble” and the U.S. would “solve the problem” with or without China’s help.
The bellicose language has dragged South Korean stocks and the won to four-week lows and caused jitters across Asia.
At the same time, U.S. Secretary of State Rex Tillerson was in Moscow to denounce Russian support for Syria’s Bashar al-Assad, raising the stakes in the Middle East.
A joint news conference by Trump and NATO Secretary General Jens Stoltenberg was also likely to generate headlines.
The yen, a favoured harbour in times of stress due to Japan’s position as the world’s largest creditor nation, also cooled in Europe after having surged over 1.2 percent against the dollar on Tuesday.
The dollar huddled at 109.72 yen, having been as low as 109.35 at one stage. Dealers warned there was little in the way of chart support until the 200-day moving average at 108.72.
The euro steadied too, having dropped to its lowest in five months at 115.91 yen. It was looking to snap 11 straight sessions of losses, a record for the single currency. It was shade higher on the dollar at $1.0618.
Political uncertainty in France added to the euro’s woes as hard-left candidate Jean-Luc Melenchon surged in the polls ahead of the May presidential election.
All this unease boosted bonds with yields on 10-year Treasuries boasting their lowest close of the year on Tuesday. Yields were last at 2.29 percent and testing a hugely important barrier on the charts.
European yields nudged only cautiously upwards despite the easier mood in other assets, as nearly 16 billion euros of upcoming debt sales weighing on risk-averse, holiday-thinned markets.
Wall Street’s futures prices ticked higher as investors wagered on an upbeat earnings season, which kicks off this week with a handful of banks.
Analysts expect earnings for all S&P 500 companies to have risen 10 percent in the first quarter from a year ago, according to Thomson Reuters data.
Oil’s winning streak got an added lift from reports Saudi Arabia was lobbying OPEC and other producers to extend a production cut beyond the first half of 2017.
Global benchmark Brent edged up 30 cents to $56.53 a barrel, while U.S. crude added 25 cents to $53.66. If sustained, this would be the longest stretch of gains since August 2016.
Additional reporting by Wayne Cole in Sydney; Editing by Tom Heneghan