SINGAPORE The yen weakened and Asian stocks headed higher on Wednesday, with investors looking for fresh opportunities to bet on risky assets after a sharp drop in oil the previous day caused an unwinding of positions.

Crude oil priced edged up after falling about 3 percent overnight, as the market focus shifted to supply concerns in Libya and upcoming U.S. demand. U.S. stock futures steadily gained in Asia, suggesting the sudden shakeout in bets on equities and higher-yielding currencies may have run its course.

The pullback in commodity prices had made investors cut exposure to risky assets such as emerging market stocks and currencies that have had steep gains recently such as the Australian dollar.

The MSCI index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.8 percent in choppy trade, with technology-related shares leading the way higher.

Tokyo's Nikkei <.N225> finished up 0.9 percent, with shares of Tokyo Electric <9501.T> surging on heavy volume on a report that its liabilities stemming from Japan's nuclear crisis may be capped. Other utilities stocks slid since they may have to help foot the bill. <.T>

U.S. stock futures rose 0.4 percent after falling for four consecutive sessions, suggesting a higher open on Wall Street.

The yen slipped more than 0.6 percent against the dollar and euro as some analysts said its gains this week were because of stretched positioning and may be an opportunity for investors to re-enter or extend their short positions.

I think the markets at the moment are just pausing to take a bit of profit and assess things in the yen crosses, said David Forrester, FX strategist at Barclays Capital in Singapore.

We have to remember that over the past two weeks we have had a big rush into yen-funded carry trades, Forrester said.

Brent crude for May, which expires on Thursday, rose 0.8 percent to $121.78 a barrel. U.S. May crude added 0.4 percent to $106.68.

Gold bounced higher on Wednesday after posting its biggest fall in a month in the previous session. Declines in bullion and silver ETF holdings suggest investors are nervous following a second bearish forecast from commodity bull Goldman Sachs.

Spot gold added more than $3 to $1,458.31 an ounce after falling as low as $1,443.49 an ounce on Tuesday. Gold hit a record around $1,476 an ounce on Monday on the prospect of more declines in the dollar.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings slipped to 1,216.299 metric tons by April 12 from 1,217.209 metric tons on April 7.

U.S. Treasuries dipped as Asian investors took advantage of their hefty gains overnight to offload some of their holdings, but market players say prices could climb further if U.S. retail sales data due later in the day shows inflation is crimping consumer spending.

(Additional reporting by Ian Chua in SYDNEY, Masayuki Kitano in SINGAPORE and Ayai Tomisawa in TOKYO.; Editing by Richard Borsuk and Robert Birsel)

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