The euro bounced from a four-year low and Asian stocks edged up on Tuesday as traders paused a selloff of riskier assets ahead of Chinese economic data and a European Central Bank meeting later in the week.

Major European stock futures were up as much as 0.4 percent and U.S. stock futures rose 1 percent, with equity markets consolidating globally after Federal Reserve Chairman Ben Bernanke offered supportive comments for the euro and said the U.S. economy had enough momentum to avoid a double-dip recession.

Fears about a spreading European sovereign debt crisis, a slowdown in China's robust growth and a weak U.S. job market have combined to sap investors' willingness to take risks for higher returns, prompting them to dump equities, high-yield bonds, the euro and emerging market currencies.

The euro has fallen 12 percent so far in the second quarter -- on track for the biggest quarterly decline since being launched in 1999 -- and global equities are the cheapest since the latest bull market started in March 2009.

The pace of decline has enticed some buyers to sift through the market, with an eye for value.

Japan's Nikkei <.N225> share average rose 0.2 percent while the MSCI Asia Pacific ex-Japan index <.MIAPJ0000PUS> added 0.7 percent. The ex-Japan index has lost some 12 percent so far this year.

We're seeing cherry-picking of shares today. Caution pervades after the U.S. market's substantial losses and continued foreign selling, but investors are scooping up some shares that they're bullish on in the longer-term, said Kim Jeong-hoon, a market analyst at Korea Investment & Securities in Seoul.

The euro climbed 0.5 percent to $1.1975 as some dealers covered their bets against the currency, lifting it up from a four-year low of $1.1875 plumbed overnight.

Bernanke said European leaders were committed to ensuring the survival of the euro and have the means to support every heavily indebted member of the currency union.

After a policy meeting on Thursday, ECB President Jean-Claude Trichet will likely face tough questioning at a news conference about liquidity provisions in the euro zone, the stability of the European financial system and details about the central bank's surprise government bond buying program.

The Australian dollar, a favorite of investors because of its relatively high interest rate, rose 1.3 percent to US$0.8203, retracing almost all of Monday's losses.

FINDING BARGAINS

The Nikkei also benefited from short covering as a key support level held in the face of early selling. The benchmark suffered its biggest one-day fall in 14 months on Monday.

Though pension funds are likely to emerge to buy at the lows, even retail investors are starting to get a bit spooked at this point, so whether they'll buy or not is key, said Kenichi Hirano, operating officer at Tachibana Securities in Tokyo.

Hong Kong's Hang Seng index <.HSI> was up 0.2 percent, with gains in index-heavyweight HSBC <0005.HK> winning out over small losses in other banks and land developers.

Short-selling of Hong Kong-listed equities dropped to 8.4 percent from 10.4 percent of trading volume on Monday, a dealer said. Banks are the most shorted sector, followed by real estate.

Valuations of global equities have come down quickly in the last several weeks, but analysts appear divided over whether the market is bottoming out. The MSCI index of world equities is trading at 11.4 times its expected 12-month earnings, the lowest since March 2009.

The uncertain global economic outlook could have an impact on earnings forecasts, though economists as a whole have not changed their growth predictions in a big way.

Asian investors are awaiting a flurry of data from China this week after reports last month indicated growth may have peaked in the world's third-largest economy.

Though the number of property sales in big Chinese cities is decreasing, likely pointing to an easing in price pressures, other indicators do not reflect a massive slowdown in the world's fastest growing economy or its demand for imported goods.

On the contrary, Taiwan's exports to China in May rose 66 percent on year-on-year basis, indicating sustained demand from a key trade market.

The benchmark 10-year U.S. Treasury yield rebounded to 3.20 percent after finishing trade in New York around 3.15 percent.

Still, in the last two months the yield has tumbled 65 basis points, squashed by investors exiting risky trades and buying Treasuries, particularly late-dated maturities. The spread between 10-year and 2-year yields has narrowed 37 basis points since April.

The sliding U.S. dollar put some upward pressure on crude prices. The July contract was up 0.7 percent at $71.90 a barrel.

(Additional reporting by Elaine Lies in TOKYO and Jungyoun Park in SEOUL)

(Editing by Kim Coghill)

Japan China Nikkei 225 Ben Bernanke