* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* U.S. 10-yr yields reach 12-month peak of 1.36%

* Shares regain some ground, wary on higher yields

* Sterling, commodity currencies on the rise

* Oil resumes climb, metals lead "real" assets higher

By Wayne Cole

SYDNEY, Feb 22 (Reuters) - Asian share markets inched higheron Monday as expectations for faster economic growth andinflation globally batter bonds and boost commodities, thoughrising real yields also make equity valuations look morestretched in comparison.

MSCI's broadest index of Asia-Pacific shares outside Japanadded 0.1%, after easing from a record top latelast week as the jump in U.S. bond yields unsettled investors.

Japan's Nikkei recouped 1.0% and South Korea0.4%, while E-Mini futures for the S&P 500 were afraction firmer.

Bonds have been bruised by the prospect of a strongereconomic recovery and yet greater borrowing as President JoeBiden's $1.9 trillion stimulus package progresses.

"Yield curves have continued to steepen, as COVID infectionrates decline further, reopening plans are discussed and a largeU.S. fiscal stimulus package looks likely," said ChristianKeller, Barclays' head of economics research.

"This in principle signals a better medium-term growthoutlook for the U.S. and beyond, as other core yields curves aremoving in the same direction," he added. "Meanwhile, centralbanks seem set to look through this year's inflation increase,keeping the curves' front end anchored."

Federal Reserve Chair Jerome Powell delivers his semi-annualtestimony before Congress this week and is likely to reiterate acommitment to keeping policy super easy for as long as needed todrive inflation higher.

European Central Bank President Christine Lagarde is alsoexpected to sound dovish in a speech later Monday.

Yields on 10-year Treasury notes have already reached 1.36%, breaking the psychological 1.30% level and bringingthe rise for the year so far to a steep 41 basis points.

Analysts at BofA noted 30-year bonds hadreturned -9.4% in the year to date, the worst start since 2013.

"Real assets are outperforming financial assets big in '21as cyclical, political, secular trends say higher inflation,"the analysts said in a note. "Surging commodities, energylaggards in vogue, materials in secular breakouts."

A COPPER-PLATED RECOVERY

One of the stars has been copper, a key component ofrenewable technology, which shot up 7.7% last week to anine-year peak. Even the broader LMEX base metal index climbed5.5% on the week.

Oil prices have gone along for the ride, aided by tighteningsupplies and freezing weather, giving Brent gains of 21% for theyear so far.

Early Monday, Brent crude futures were up 43 centsat $63.34 a barrel, while U.S. crude added 11 cents to$59.35,

All of which has been a boon for commodity linkedcurrencies, with the Canadian, Australian and New Zealanddollars all sharply higher for the year so far.

Sterling has also reached a three-year top above $1.4000, aided by one of the fastest vaccine rollouts in theworld. British Prime Minister Boris Johnson is due to outline apath from COVID-19 lockdowns on Monday.

The U.S. dollar index has been relatively range-bound, withdownward pressure form the country's expanding twin deficitsbalanced by higher bond yields. The index was last at 90.341, not far from where it started the year at 90.260.

Rising Treasury yields has helped the dollar gain somewhaton the yen to 105.42, given the Bank of Japan is activelyrestraining yields at home.

The euro was steady at $1.2121, corralled betweensupport at $1.2021 and resistance around $1.2169.

One commodity not doing so well is gold, partly due torising bond yields and partly as investors question if cryptocurrencies might be a better hedge against inflation.

The precious metal stood at $1,782 an ounce, havingstarted the year at $1,896. Bitcoin was up 2.3% onMonday at $57,275, having started the year at $19,700.

(Editing by Shri Navaratnam)