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GLOBAL MARKETS-Gains in stocks capped by rise in real yields, Netflix disappoints

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* Real yields flirt with positive territory

* Oil trades above $100 a barrel

* Dollar hits fresh two-decade peak vs yen

* U.S. stock futures lower after Netflix

By Huw Jones

LONDON, April 20 (Reuters) - Stocks edged higher on Wednesday, but gains were capped by questions over how far real bond yields will rise as investors sifted through disappointing Netflix earnings and war continued in Ukraine.

The STOXX index of 600 European companies gained 0.4% to 458.17 points. The MSCI all country stock index was 0.2% firmer.

Investors kept a wary eye on the 10-year Treasury Inflation-Protected Securities (TIPS), whose yields briefly broke above negative territory on Tuesday for the first time since March 2020.

A rise in real yields poses a fresh headwind for risky assets such as stocks, especially big tech firms which report earnings next week, now more closely scrutinised after Netflix shares sank on Tuesday evening after news it was losing subscribers.

Tech-heavy Nasdaq futures were down 0.6 percent, with S&P500 futures shedding 0.3%

"You are going to have to see real yields in much more positive territory before they make stock markets less attractive," said Michael Hewson, chief market analyst at CMC Markets.

"The bigger question the markets are wrestling with at the moment is has inflation peaked? If inflation has peaked, then maybe it's a good time to buy bonds again, which is why we are seeing so much uncertainty as to the future direction of the stock markets," Hewson said.

The dollar climbed to a fresh two-decade peak to the yen, buoyed as the Bank of Japan stepped into the market again to defend its ultra low interest rate policy.

Data is beginning to emerge from the International Monetary Fund this week on how much the two-month old war in Ukraine is hitting the global economy.

The U.S. Federal Reserve issues its "Beige Book" of economic conditions from late February to early April on Wednesday. "We expect the pace of economic activity eased slightly to a modest pace," UniCredit analysts said in a note.

In Europe, German producer prices hit a record high amid war in Ukraine.

In an election which has rattled French bonds, President Emmanuel Macron and far-right candidate Marine Le Pen will face each other in a televised debate on Wednesday evening. Macron, however, appears to be pulling ahead of Le Pen in the polls ahead of Sunday's final round in the election.

ASIA SHARES RISE

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3%, its first positive session in a week.

Japan's Nikkei rose 0.8%, like other markets in the region tracking Tuesday's gains on Wall Street where the three main benchmarks had their best days in over a month, helped by several strong earnings results. The Nasdaq closed up 2.2%.

China bucked the regional trend as Chinese blue chips shed 1.5% after the central bank kept its benchmark lending rates unchanged, despite frequent government pledges to support a slowing economy hit by the worst COVID-19 outbreak in two years.

That decision in contrast helped the Chinese yuan recover after hitting its lowest since October in early trade.

"Investors were looking for stimulus from China but the PBOC didn't deliver today," said Carlos Casanova. "Markets inevitably are going to interpret that in a negative way with the lockdowns extending into April and beyond, meaning the worst months for economic data are ahead of us."

The yield on a highly -traded contract of China's 10-year government bond fell below U.S. 10-year Treasury yield for the first time since 2010 on earlier this month, and Chinese 10 year yields were last around 2.85%.

Benchmark 10-year Treasury yields were within a whisker of 3% on Wednesday - though were little changed on the day.

Yield differentials are also a factor for Japan, where the central bank on Wednesday offered to buy an unlimited amount of 10-year Japanese government bonds (JGB) at 0.25%, in its third move since February to defend its yield target.

This yield curve control has sent the yen to 20-year lows against the dollar, but the dollar retreated 0.2% on the yen on Wednesday amid some nerves that intervention - verbal or otherwise - from Japanese authorities could drive a bounce.

Oil prices rebounded from sharp losses in the previous session as concerns about tighter supplies from Russia and Libya dominated.

Brent crude futures rose 1.2% to $108.55 a barrel.

Spot gold fell 0.4% to its lowest in a week dragged down by higher yields.

(Reporting by Huw Jones in London, Tom Westbrook in Singapore and Alun John in Hong Kong; Editing by Himani Sarkar and Kim Coghill)