GLOBAL MARKETS-Asian stocks cautious ahead of Powell's speech; yuan at fresh 11-1/2 yr low

* Asian stock markets:

* European stock futures point to a higher opening

* Yuan at new 11-1/2 yr low; offshore yuan weaken past 7.1 per USD

* Sterling jumps as traders cling to Merkel's backstop comments

* Traders await Fed chair Powell's Jackson Hole speech, G7 summit

By Tomo Uetake

TOKYO, Aug 23 (Reuters) - Asian shares struggled to make headway on Friday as uncertainty over how much further the U.S. Federal Reserve would cut interest rates added to investors' worries over slowing global growth.

With the U.S.-China trade war dragging on, and political tumult in Hong Kong, Italy and Britain adding to the tense backdrop, investors were keenly awaiting Fed Chair Jerome Powell's speech at a gathering of central bankers in Jackson Hole, Wyoming, later in the day (1400 GMT).

Pan-European Euro Stoxx 50 futures gained 0.7% in late Asian trade, indicating European cash share markets will open higher on Friday.

MSCI's broadest index of Asia-Pacific shares outside Japan edged 0.3% higher and was up 1.0% for the week, on track to break a four-week losing streak.

Japan's benchmark Nikkei advanced 0.4% and Australian stocks added 0.3%.

The Shanghai Composite and the blue-chip CSI300 were up 0.3% and 0.5%, respectively, while Hong Kong's Hang Seng gained 0.5%.

"It's going to be another wait-and-see day for traders ahead of Powell's Jackson Hole speech. Investors are hoping for some soothing words from him," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

Wall Street stocks were mixed on Thursday, with the S&P 500 closing little changed, while the Dow was up 0.2% and the Nasdaq falling 0.4%.

In the U.S. bond market, the closely watched two-year, 10-year Treasury yield curve briefly moved back into inversion overnight, a shift that also occurred last week and sent financial markets into a tailspin amid worries of a sharp global downturn.

An inversion in the U.S. yield curve has presaged several past U.S. recessions, raising fears the decade-long expansion in the world's biggest economy might be nearing its end.

While markets overwhelmingly expect the Fed to follow up its first rate cut in a decade with more stimulus at its meeting next month, some policymakers disagree.

Kansas City Fed President Esther George, who dissented against the decision to ease juin July, and Philadelphia Fed President Patrick Harker, who said he "reluctantly" supported the cut, both said the U.S. economy does not need more stimulus at this point.

Dallas Fed President Robert Kaplan said the businesses had become much more cautious due to surprises on trade policy and he was "going to at least be open-minded about making some adjustment" if he sees continued weakness.

All of that has made Powell's speech in Jackson Hole pivotal for markets as they look for any clues on future easing, after the Fed last month cut rates for the first time since the financial crisis.

Any indications of hawkishness in the Fed chief's comments might hurt riskier assets, though the dollar stands to benefit.

The greenback slipped on Thursday, but moved within narrow ranges. In Asian trading, the dollar was up 0.2% against a basket of major currencies to 98.347.

The euro eased marginally against U.S. currency at $1.1067. A survey showing a surprise uptick in euro zone business growth for August was offset somewhat by trade war fears knocking future expectations to their weakest in over six years.

The pound jumped to a three-week high of $1.2273 overnight after traders interpreted comments from German Chancellor Angela Merkel to mean that a solution to the Irish border problem could be found before Britain leaves the European Union on Oct. 31.

Merkel on Wednesday challenged Britain to come up with alternatives to the Irish border backstop within 30 days, but French President Emmanuel Macron cautioned there would be no renegotiation of the Brexit deal. Sterling last quoted at $1.2230, 0.2% weaker on the day.

China's yuan extended losses, threatening to stoke trade tensions between Washington and Beijing.

Spot yuan slid to as low as 7.0992 per dollar, its weakest since March 2008, although the central bank set the midpoint rate at 7.0572, its weakest level in 11-1/2 years, but was much stronger than traders had expected.

"The markets are not impacted by the drop in yuan primarily because capital accounts are well controlled and PBOC has managed market expectation well around the depreciation," said Caroline Yu Maurer, head of Greater China equities at BNP Paribas Asset Management.

Washington labelled China a currency manipulator early this month after a sharp slide in the yuan. Concern about China's economy is growing because U.S. tariffs on roughly $150 billion of Chinese goods will take affect from Sept. 1.

Oil prices weakened overnight, with both Brent crude and U.S. West Texas Intermediate down 0.6% each, on worries about the global economy.

Brent crude was last up 0.3% at $60.12 per barrel and WTI crude added 0.3% to $55.49.

Gold prices dipped on Thursday but held near the pivotal level of $1,500 per ounce, underpinned by demand for the precious metal amid uncertainties around monetary policy, trade and geopolitical tensions. Spot gold was last down 0.3% at $1,494.22 an ounce. (Reporting by Tomo Uetake; Editing by Shri Navaratnam & Kim Coghill)

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