By Nichola Saminather and Hideyuki Sano
SINGAPORE/TOKYO (Reuters) - Asian shares slipped in subdued trading on Wednesday as investors pulled back on positions ahead of the long Easter weekend, opting for caution following the suspected Islamic State suicide bomb attacks in Brussels.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) fell 0.5 percent, its first decline in six days. Japan's Nikkei (N225) surrendered earlier gains to close down 0.3 percent.
Chinese shares <.SSEC> (CSI300) were little changed, while Hong Kong's Hang Seng retreated 0.6 percent.
European markets were poised for a similar start, with financial spreadbetters expecting Britain's FTSE 100 (FTSE) to open down 0.2 percent, Germany's DAX (GDAXI) to be 0.1 percent lower, and France's CAC (FCHI) to start the day little changed.
Financial markets took in their stride news of the attacks in Brussels that killed at least 30 people.
Risk appetite quickly recovered to help MSCI's emerging market index (MSCIEF) rise 0.2 percent to four-month high early in the Asian day, but it had eased back 0.5 percent towards the end.
"Generally, the impact of terror attacks has become less and less dramatic after 9/11," said Berard Aw, market strategist at online brokerage IG in Singapore. "But investors may be squaring positions ahead of the long weekend, especially in light of the Brussels attacks."
Sentiment at some of the biggest companies across Asia brightened in the first quarter of 2016, rising from a four-year low registered three months prior, as executives bet on economic improvement in China, a Thomson Reuters/INSEAD survey showed.
Koichi Yoshikawa, executive director of financial markets at Standard Chartered (LON:STAN) Bank in Tokyo, said the recent Group of 20 meeting and annual gathering of China's parliament had restored some faith in the outlook for the global economy, as investors were reassured that policymakers would take appropriate monetary and fiscal policy measures to bolster their economies.
"That is reassuring markets and investors' funds that had fled to the U.S. markets are returning to high-yielding currencies and emerging markets," he said.
In the currency market, the euro
Sterling slipped to $1.4194
The Chinese yuan eased against the dollar, with the spot market
The safe haven yen last stood little changed at 112.32 to the dollar
The dollar, which edged down in early trade as Asian investors reacted to news of the Brussels attacks, was helped by a rise in U.S. bond yields after Chicago’s Federal Reserve president, seen as a policy dove, struck a bullish tone on the U.S. economy.
Chicago Fed President Charles Evans said he expects two more rate increases this year, based on the current economic outlook.
The dollar index (DXY), which tracks the U.S. currency against six major rivals, advanced 0.1 percent to 95.764.
The 10-year U.S. Treasuries yield rose to 1.954 percent (US10YT=RR), its highest in a week, compared to 1.871 percent at the end of last week, and edging near last week's seven-week high of 2.002 percent. It was last at 1.9316 percent.
U.S. interest rate futures <0#FF:> are also fully pricing in a chance of more than one rate hike by the end of year.
Oil prices slipped from their highs after U.S. industry data showing bigger than expected builds in domestic inventory, but prices maintained a firm tone, supported by general recovery in risk appetite.
Brent futures (LCOc1) slid 1 percent to $41.37 per barrel, but remained near the three-month high of $42.54 set on Friday.
U.S. crude (CLc1) also declined 1.1 percent to $41.00.
The American Petroleum Institute (API), an industry group, said after futures market settlement on Tuesday that U.S. crude stockpiles rose almost 9 million barrels last week to reach a record high of nearly 532 million.