* MSCI Asia touches 3-year peak, Nikkei rises after Japan
* U.S. stock futures edge higher, underpinned by upbeat
* Slumping U.S. Treasury yields still weigh on dollar
By Lisa Twaronite
TOKYO, July 22 (Reuters) - Asian stocks touched a three-year
peak on Tuesday, despite lingering concerns about crises in
Ukraine and Gaza, while the yen eased against the dollar and the
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 0.5 percent to its highest since 2011,
while Japan's Nikkei stock average rose about 1 percent
after a national holiday closed markets on Monday.
"Investor sentiment has settled as the VIX has stayed calm,"
said Akio Yoshino, chief economist at equity research and
strategy department at Amundi Japan.
The CBOE Volatility Index, which is a gauge of market
risk aversion, jumped 32.2 percent on Friday in Asia, the
biggest percentage rise since April 2013.
U.S. shares slumped overnight, as the rising global tensions
offset some upbeat U.S. earnings. So far this reporting period,
66 percent of S&P 500 companies have topped Wall Street's profit
expectations, according to Thomson Reuters data, above the 63
percent average since 1994.
But the three major U.S. indexes ended well off their lows,
a sign that some appetite for riskier assets remained, and
S&P 500 E-Mini futures edged higher in Asian trade.
Malaysia has reached an agreement with the leader of the
separatist group to retrieve the bodies of the victims from last
week's downing of a Malaysia Airlines passenger jet as well as
the plane's two black boxes, Malaysian Prime Minister Najib
Razak said on Tuesday.
Meanwhile, in the Gaza Strip, the Palestinian death toll
jumped to more than 500 and Israeli losses mounted as well, as
the United States stepped up efforts to secure a ceasefire.
Lower U.S. Treasury yields continued to weigh on the dollar
on Tuesday, after safety-seeking investors bought U.S.
government debt in recent days.
The yield on the benchmark 10-year U.S. Treasury note
stood at 2.472 percent in Asia, not far from its
U.S. close of 2.475 percent.
The yield on the 30-year Treasury bond inched
down to 3.262 percent from its U.S. close of 3.264 percent On
Monday, when it fell as low as 3.249 percent, the lowest since
Investors also awaited U.S. consumer prices data due later
in the session at 1230 GMT for clues as to the timing for
monetary tightening by the Federal Reserve.
The Labor Department is expected to report that U.S.
inflation eased slightly to 0.3 percent in June, after rising
food prices pushed the index to its biggest increase in more
than a year in May.
The dollar edged higher on the day against its Japanese
counterpart to 101.48 yen, while the euro stood at 137.25
yen, off last Friday's five-month trough of 136.71
"Geopolitical developments channelled through higher oil
prices will remain a key theme this week," said Shinichiro
Kadota, chief FX strategist at Barclays Bank in Tokyo.
The euro was largely steady at $1.3524, pulling away
from a five-month low of $1.3491 touched on Friday.
In commodities, U.S. oil for August delivery rose
about 0.5 percent to $105.10 a barrel, bolstered by fears of
escalating tension in the Middle East and as traders covered
positions ahead of the contract's expiration later on Tuesday.
Spot gold was steady at $1,311.60 an ounce.
(Additional reporting by Ayai Tomisawa in Tokyo; Editing by
Shri Navaratnam & Kim Coghill)