GLOBAL MARKETS-Asian stocks rise after week-long sell-off

SINGAPORE, Mar 6 (Reuters) Asian stocks rose on Tuesday after five days of losses, as bruised investors picked up shares in firms such as Sony and BHP Billiton that had been beaten down during a global sell-off.

The dollar and the euro rebounded from three-month lows against the yen, as stock market gains helped stem a rush by investors to cash out of riskier assets and pay off the cheap yen loans that had financed them.

''The currency market's close correlation with the stock market remains in place,'' said Mitsuru Sahara, senior dealer at Bank of Tokyo-Mitsubishi UFJ. ''If the Nikkei falls sharply, the market will eye the dollar falling below 115 yen.'' Oil steadied above a barrel, after dropping more than 2 percent on Monday on fears of faltering demand.

Japanese government bonds edged lower, taking a breather after racing to three-month highs in the previous session as market players deserted stocks in favour of safer assets.

''I think market players are watching the recovery in share prices,'' said Mitsumaru Kumagai, chief JGB strategist for Merrill Lynch. ''The key now is whether the weakness in global equities will continue as a trend or whether it will stop.'' A broad rout in equity markets had been triggered by a near 9 percent fall in China's main stock index last Tuesday.

That had combined with jitters about stalling U.S. growth and fears that world stock markets -- many of which had been trading around record highs -- were overvalued to spark a wave of selling.

MSCI's global equity index <.msciwd> has fallen more than 6 percent from its close on Feb. 26, while a measure of emerging markets <.mscief> -- which were hardest hit in the flight from riskier investments -- remains down nearly 10 percent.

RECOVERY UNDER WAY? Tokyo's Nikkei <.n225> rose 0.8 percent in morning trade, regaining some poise after tumbling 8.6 percent during a five-day slide.

''The Nikkei fell nearly 2,000 points, so stock prices certainly don't look expensive now,'' said Takahiko Murai, general manager of equities at Nozomi Securities.

''I think stocks will recover, but the question is whether or not we've seen the bottom.'' Consumer electronics giant Sony gained 3.9 percent, after falling more than 11 percent during the previous five sessions, and car maker Toyota Motor Corp. rose 2.3 percent, after dropping 10 percent during the same period.

In Sydney BHP, the world's biggest miner, rose 2 percent, while rival Rio Tinto gained 1.2 percent.

MSCI's broadest index of Asian shares outside Japan <.msciapj> was up 1.3 percent by 0210 GMT, as benchmarks in Australia <.axjo>, South Korea <.ks11>, Hong Kong <.hsi> and Singapore <.sti> rose between 1.1 percent and 1.6 percent.

U.S. stock fell on Monday, with the Dow Jones industrial average <.dji> ending down 0.5 percent and the Nasdaq Composite Index <.ixic> shedding 1.2 percent.

The dollar bought around 116.35 yen at 0210 GMT, up more than 1 yen from day's lows as it pulled away from a three-month low of 115.16 touched on Monday.

A surge in the Japanese currency had been driven by a sharp unwinding of so-called carry trades, in which investors borrow in low-yielding yen to buy higher-yielding, riskier assets elsewhere.

The euro traded around 152.30 yen , rebounding sharply from a three-month low of 150.74 yen.

''Stock markets don't appear to be sliding significantly further, and that could help the currency market consolidate,'' a dealer at a Japanese bank said.

March 10-year Japanese government bond futures slipped 0.09 point to 135.15 , while benchmark 10-year yields rose 1 basis point to 1.630 percent.

U.S. crude edged down 3 cents to .04 a barrel, while gold traded around 8.70 an ounce, after earlier touching a six-week low of 2.30.

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