GLOBAL MARKETS-Asian stocks rise as Apple drives tech gains, virus worries ease

* Asian stock markets:

* Pessimism about China virus recedes

* Treasury yield rise shows risk appetite has improved

* Oil market eyes OPEC output cuts

TOKYO, Jan 29 (Reuters) - Asian shares rose on Wednesday as better-than-expected Apple Inc earnings drove some regional tech gains although broader confidence was capped by worries about the economic impact of China’s virus outbreak.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2%, ending four days of losses. Australian shares rose 0.41%, while Japan’s Nikkei stock index rose 0.27%.

While China’s flu-like illness, which has killed more than 100, continues to keep markets on edge, there were signs investors see the recent rout in asset prices as overdone.

Long-term U.S. Treasury yields traded above short-term yields and the Japanese yen nursed losses as investors pulled back from safe-havens in favour of more risky assets like equities.

Oil futures extended gains in Asia as pessimism about the virus eased somewhat and after OPEC sources said the cartel wants to extend crude output cuts by three months to June, easing concern about excess supplies.

Other investors say the growing number of travel restrictions within China and the cancellation of international flights could prevent a significant worsening of the virus.

“The rise in Treasury yields shows the risk-off trade is falling out of favour,” said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo.

“This is supportive of Japanese stocks. You can buy Asian shares too, but I would not get too aggressive while Chinese markets are closed.”

U.S. stock futures fell 0.12% in Asia on Wednesday. The S&P 500 rose 1.01% on Tuesday, rebounding from its worst daily decline in four months on Monday, as shares of Apple Inc ahead of its fourth-quarter results.

After the market close, Apple reported better-than-expected profits for the fourth quarter and forecast revenue in the current quarter above Wall Street expectations.

The yield on benchmark 10-year Treasury notes rose to 1.6493% versus a yield of 1.5821% on three-month Treasury bills in another sign that sentiment has stabilised.

The yield curve briefly inverted on Tuesday when 10-year yields fell below their 3-month counterparts for the first time since October. An inverted yield curve has historically been an indicator of looming recession.

Markets in Asia could be subdued before the U.S. Federal Reserve meeting later on Wednesday. The Fed is expected to reiterate its desire to keep rates unchanged at least through this year.

In currency markets, the safe-haven yen was quoted at 109.13 per dollar following a 0.2% loss on Tuesday. The Swiss franc, another popular safe haven, traded at 0.9730 versus the dollar, close to its lowest in almost three weeks.

In the offshore market, the yuan rose for a second day to 6.9605 per dollar. China’s onshore markets are closed for the Lunar New Year holidays.

U.S. crude ticked up 0.47% to $53.73 a barrel in Asian trading.

OPEC wants to extend current oil output cuts until at least June from March, with the possibility of deeper reductions on the table if oil demand in China is significantly impacted by the spread of a new coronavirus, OPEC sources said.

Sterling edged lower to $1.3022, on course for its fifth day of declines due to worries about Britain’s trading relationship with the European Union.

Investors are also cautious ahead of a Bank of England policy decision on Thursday, which many analysts say is too close to call. (Reporting by Stanley White; Editing by Sam Holmes)