* Nikkei leads Asia shares higher as earnings lift Wall St
* Eyes on China markets after PBOC cuts bank reserve requirements
* IMF sticks with global growth call but sees mounting risks
* U.S. yield curve flattens as investors fret on economic outlook
By Wayne Cole
SYDNEY, April 18 (Reuters) - Asian shares crept ahead on Wednesday after Wall Street took heart from upbeat corporate earnings, though nagging concerns about trade barriers and the global growth outlook kept currencies and bonds subdued.
Dealers were anxious to see if a surprise policy move by the China’s central bank late on Tuesday might help soothe Shanghai markets after a couple of days of sharp losses.
The PBOC will reduce the cash banks hold as reserves in a move that frees up lending for small firms but falls short of a broad monetary easing.
The Shanghai index hit a near one-year low on Tuesday after the United States banned American companies from selling components to Chinese telecom equipment maker ZTE Corp.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent in early trade, though that follows four straight sessions of losses.
Japan’s Nikkei added 0.6 percent, with investors waiting for any developments on trade as Japanese Prime Minister Shinzo Abe meets President Donald Trump at his Mar-a-Lago resort.
E-Mini futures for the S&P 500 gained 0.1 percent after robust earnings from Netflix, Goldman Sachs and healthcare companies fuelled optimism about what is expected to be the strongest earnings season in seven years.
The Dow ended Tuesday up 0.88 percent, while the S&P 500 rose 1.06 percent and the Nasdaq 1.78 percent.
Yet there were signs of caution in the latest BofA Merrill Lynch survey of fund mangers which found investors squirreling more funds away into cash, while cutting their equity allocation to an 18-month low.
The outlook for the global economy also darkened with just a net 5 percent expecting stronger growth in the next 12 months - the lowest since the United Kingdom voted to leave the EU in June 2016.
While the IMF on Tuesday left its global growth forecasts unchanged for 2018 and 2019, it judged medium-term risks were to the downside - citing financial vulnerabilities, geopolitical strains and tariffs.
“The global narrative has quickly shifted from synchronous global growth, upgraded growth and glimmers of inflation in early 2018 to a focus on tariffs and protectionist rhetoric,” said Robert Rennie, head of financial markets strategy at Westpac.
“We ultimately believe that we will see a negotiated solution, but there is still a long way to go and further bouts of volatility and headline risk seem assured.”
Worries about the longevity of the U.S. economic expansion were one reason the Treasury curve was at its flattest in a decade and why some interest-rate curves were starting to price in rate cuts for 2020.
The air of uncertainty was keeping currencies within well-worn ranges. The dollar hovered at 107.01 yen, having spent all of Tuesday in a half-a-yen band.
The euro was stuck at $1.2370, after topping out at $1.2413 overnight, while the dollar index was a fraction lower at 89.495.
In commodity markets, gold was little changed at $1,346.32 an ounce.
Oil prices firmed with Brent crude futures up 17 cents to $71.75 a barrel, while U.S. crude rose 33 cents to $66.85 a barrel.
Reporting by Wayne Cole Editing by Eric Meijer