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European and Asian stocks mostly rise despite China

selloff

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Bond market calm after rising fiscal health concerns

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Weak job openings data, Fed's dovish comments reinforce

rate cut

bets

By Marc Jones

LONDON, Sept 4 (Reuters) - Stocks were mostly higher on

Thursday as dovish comments from Federal Reserve officials and a

smooth auction of super long-term debt in Japan eased some of

the recent government bond market jitters.

China bourses had tumbled overnight on reports Beijing

wanted to cool the red hot rally in its equity markets,

especially the tech sector , but Europe had a

much smoother start.

The region's STOXX 600 ticked up 0.3% as trading

settled and the angst about rising long-term government

borrowing costs in the likes of France, Britain and U.S. gave

way to relative calm.

Oil prices extended their weak week after a Reuters

report that OPEC+ officials were eyeing an increase in output

targets at their meeting this weekend, while the dollar was in

drift mode ahead of Friday's crucial jobs report.

Several key Federal Reserve officials have bolstered

expectations of an imminent Fed rate cut in recent days. Traders

are now pricing in a near 100% chance that one will be delivered

at the central bank's next meeting on Sept. 17.

"The markets have become a little bit more convinced about a

Fed rate cut this month, so that has put some modest downward

pressure on bond yields," MUFG's global markets division head of

research, Derek Halpenny, said.

He added that the Chinese equity market dip had weighed a

little on the Aussie and Kiwi dollars in the FX markets, but

otherwise it was largely a case of "consolidate and wait" for

Friday's payrolls numbers.

Europe's bond buyers nudged the German 30-year bond yield

down just over 1 basis point to 3.3%. France's was

down roughly the same at 4.45%, having hit 4.523% on Tuesday,

its highest since June 2009 on worries its government could

collapse again.

FALLING STAR

Overnight, MSCI's broadest index of Asia-Pacific shares

excluding those from Japan had ended 0.2% lower

after a Bloomberg report that financial regulators were

preparing cooling measures for the market.

Beijing bluechips fell as much as 2.6%, while the

tech-heavy STAR 50 index, which soared nearly 30% last month,

dropped more than 6% in its worst day since April.

Wall Street futures were pointing to an easy restart.

Payrolls aren't till Friday, but traders will get to hear

the nomination hearing of Stephen Miran, U.S. President Donald

Trump's pick to replace resigning Fed board member Adriana

Kugler.

"It'll be interesting to hear senators' questioning of

Miran's views on Fed independence," Deutsche Bank's Global Head

of Macro Research, Jim Reid, said, given that Trump has moved to

fire another Fed official, Lisa Cook, and has been repeatedly

criticising Fed Chairman Jerome Powell.

In testimony posted to the Senate Banking Committee's

website on Wednesday ahead of Thursday's hearing, Miran said he

intended to "preserve" that independence.

With all the focus the independence issues have created on

already sky-high government debt levels, there was relief that

an auction of 30-year Japanese bonds had gone smoothly in Tokyo

overnight.

Australian shares advanced 1%, recovering from their

biggest one-day sell-off since April, while the Nikkei 225

ended 1.5% higher.

"We got one or two days of weakness but the dip-buyers have

stepped in," Tony Sycamore, market analyst at IG in Sydney,

said.

India's benchmark Sensex rose 1% as markets

reopened, after the government slashed levies on several goods

to fire up consumption and counteract U.S. tariffs.

Wednesday's Federal Reserve's "Beige Book" had painted a

mixed picture of U.S. economic health, which appeared to

underscore monetary policymakers' concerns. Analysts at ING

called it quite "bleak" and said it was "littered with" tariff

warnings on prices.

The yield on benchmark 10-year Treasury notes

inched down to 4.2% in European trading with the more

rate-sensitive 2-year yield just above 3.6%.

The dollar edged up 0.1% against the yen at 148.25,

keeping within the trading range where it has stayed since the

beginning of August.

It was also fractionally higher against the euro at

$1.1650. In commodities markets, Brent crude dipped 0.6%

to $67.17 a barrel and gold edged back 0.8% after hitting

a record high of 3,578.5 an ounce on Wednesday.

(Additional Reporting by Gregor Stuart Hunter in Singapore;

Editing by Andrew Heavens)