* Asia stocks steady on perceived easing in trade tensions
* Soft U.S., China economic data underscore slowdown
* U.S. bond yields dip, 2-yr yields at 15-month low
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano
TOKYO, May 16 (Reuters) - Asian shares steadied on Thursday on news that U.S. President Donald Trump is planning to delay tariffs on auto imports, providing much needed relief to markets hit by a flare-up in trade tensions and on weak U.S. and and Chinese economic data.
MSCI's broadest index of Asia-Pacific shares outside Japan was flat, with both Australia and South Korea little changed.
Japan's Nikkei fell 0.6%, with banks hurt by weak earnings.
On Wednesday, Wall Street shares extended their rebound, with the S&P 500 gaining 0.58% and the MSCI's broadest gauge of world stocks bouncing back from a two-month low hit on Tuesday.
The uptick came after three administration officials told Reuters on Wednesday that Trump is expected to delay a decision on tariffs on imported cars and parts by up to six months.
Hyundai Motor jumped more than 5% but reaction in Japanese carmaker shares was muted.
Also on Wednesday, less than a week after Washington slapped higher tariffs on $250 billion imports from China, U.S. Treasury Secretary Steven Mnuchin said he will likely travel to Beijing soon to continue negotiations with Chinese counterparts.
The positive trade developments lifted risk sentiment that had been dampened earlier in the session by weak economic data.
China reported surprisingly weaker growth in retail sales and industrial output for April, with overall retail sales posting the slowest increase since May 2003.
In the U.S., retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods, while industrial production fell 0.5% in April, the third drop this year.
That prompted the Atlanta Federal Reserve's GDPNow forecast model to cut the second-quarter growth estimate to 1.1% from 1.6% estimated on May 9.
Weak data underpinned U.S. bond prices, pushing down their yields further.
The 10-year U.S. Treasuries yield eased to 2.376 percent , near its 15-month low of 2.340 percent touched on March 28.
The two-year notes yield hit a 15-month low of 2.139 percent on Wednesday and last stood at 2.155 percent.
Fed funds rate futures are fully pricing in a rate cut by the end of this year and more than a 50 percent chance of a move by September.
"The markets are inching step by step in pricing in a rate cut. That is a sea change from a year ago when the consensus was three to four rate hikes a year," said Akira Takei, bond fund manager at Asset Management One.
Oil prices edged up on the prospect of mounting tensions in the Middle East hitting global supplies despite an unexpected build in U.S. crude inventories.
Brent crude rose 0.7% to $72.25 a barrel, while U.S. West Texas Intermediate (WTI) crude fetched $62.45 a barrel, up 0.7%.
The United States pulled staff from its embassy in Baghdad on Wednesday out of apparent concern about perceived threats from Iran.
The sabotage of the tankers, for which no one has claimed responsibility, and Saudi Arabia's announcement on Tuesday that armed drones hit two of its oil pumping stations have raised concerns Washington and Tehran may be inching toward conflict. (Editing by Shri Navaratnam)