GLOBAL MARKETS-Stocks creep up, but wary of US Treasury yields

SINGAPORE, June 12 (Reuters) Major Asian stock markets rose on Tuesday, although Japan's Nikkei fell on caution ahead of an interest rate decision this week, while high Treasury bond yields kept concerns about rising global credit costs on the agenda.

The dollar held firm against the euro and the yen as investors tracked 10-year U.S. Treasury yields , which in Asian trade rose to 5.1619 percent, to see if they would re-test last week's peak of 5.25 percent.

Treasury yields have risen sharply over the past week on concern that the Federal Reserve would keep interest rates higher for longer and that interest rates around the world were heading up.

In Japan, stronger-than-expected wholesale price data for May underscored the case for a rate increase in the third quarter, and pinned Japanese government bond 5-year yields to 1.520 percent -- near a record high of 1.525 percent.

The Bank of Japan announces the outcome of its latest interest rate review on Friday, although the central bank is widely expected to keep rates on hold for now.

Still, investors in Japanese stocks were wary, leaving Tokyo's Nikkei average <.n225> down 0.4 percent by the midsession.

''This week's BOJ meeting is one of the reasons why the market cannot be bullish because the possibility of rate hikes is not zero,'' said Katsuhiko Kodama, a senior strategist at Toyo Securities.

Japanese insurers were among the biggest fallers. Mitsui Sumitomo Insurance Co. Ltd. nursed a 4.5 percent drop.

Other major stock indexes in the region notched up modest gains.

Australia's benchmark S&P/ASX 200 index <.axjo> rose 0.7 percent by 0210 GMT as miners like BHP Billiton and Rio Tinto gained off the back of a metals rally.

Hong Kong's Hang Seng index <.hsi> opened little changed as investors watched for data on China's consumer price inflation.

That showed prices in May rose 3.4 percent from a year earlier, the fastest annual pace in 27 months, as the price of pork and other foods jumped. The figure was in line with expectations though.

South Korea's KOSPI <.ks11> index rose 0.4 percent, while Taiwan's benchmark index <.twii> and Singapore's Straits Times <.sti> both rose around 0.5 percent.

MSCI's broadest index of shares in Asia outside of Japan <.msciapj> was up 0.6 percent by 0218 GMT.

On Wall Street, U.S. stocks ended flat on Monday amid lingering concerns about higher interest rates. The benchmark U.S. 10-year Treasury yield hovered just below a one-year high of 5.25 percent struck last Friday.

NZ DOLLAR EYED The New Zealand dollar clawed back a little of Monday's dramatic drop following central bank intervention to sell the currency after it hit a 22-year high versus the U.S. dollar last week.

The selling on Monday by the Reserve Bank of New Zealand helped drive the New Zealand dollar to a low of US$0.7467 from US$0.7638 in late U.S. trading on Friday. The kiwi was trading up 0.08 percent at US$0.7519 by 0222 GMT.

The dollar was little changed around 121.60 yen .

The euro was steady around $1.3359 , near a two-month low around $1.3320 touched on Friday as U.S. Treasuries supported the dollar.

Oil prices eased but held above $69 a barrel. Losses were limited by news that OPEC kingpin Saudi Arabia would keep supply curbs in place through July.

Global benchmark London Brent crude was down 16 cents at $69.40 a barrel, having risen 87 cents in New York overnight.

Spot gold was steady at around $654 an ounce, while copper rose more than 1 percent, adding to gains in London futures on strike threats at major copper producers in Latin America.

REUTERS SG RS0908