By Stella Qiu

SYDNEY (Reuters) - Asian markets were trying to find a firmer footing on Friday after a rough week, hammered by concerns about China's ailing economy and fears of U.S. rates staying higher for longer as long-term bond yields surged.

MSCI's broadest index of Asia-Pacific shares outside Japan were up 0.1% after hitting a nine-month low the session before. It was, however, headed for a weekly loss of 2.8%, the third straight week of declines.

Japan's Nikkei lost 0.4% and was down 3% on the week.

Data early on Friday showed Japan's core inflation slowed in July, a result that is likely to support market wagers that the Bank of Japan is in no hurry to phase out monetary easing anytime soon.

China's blue-chips rebounded 0.2%, while the Hong Kong's Hang Seng Index fell 0.3%. Chinese property giants gained 0.3%, pulling away from a nine-month low hit just a session ago.

Adding to concerns of a deepening crisis in China's property sector, China Evergrande, one of the country's biggest real estate developers, on Thursday filed for protection from creditors in a U.S. bankruptcy court.

China stocks have shed 10% from their highs in January, as dismal economic data laid bare the stuttering post-pandemic recovery, with investors remaining unimpressed with just piecemeal support measures from policymakers.

"At the start of the year China's economy was powering ahead. But the picture has gradually worsened since, and now looks quite bleak," said Jonas Goltermann, deputy chief markets economist at Capital Economics.

"While it's hard to see a catalyst for a lasting turnaround in China's equity market, a lot of bad news is already discounted in it...Our central scenario remains that they make little-to-no gains rather than crashing."

Elsewhere, Treasuries rallied a little after being heavily sold off for the past five weeks. Ten-year yields eased 5 basis points to 4.2564% in Asia, after touching a 10-month top of 4.3280% on Thursday.

30-year yields also fell 4 basis points to 4.3684% and off from a 12-year high of 4.426% hit overnight.

A strong run of U.S. economic data, including a fall in weekly jobless claims on Thursday, suggested the world's largest economy is not slowing as desired in the face of high borrowing costs, prompting traders to scale back rate cuts bets next year.

"The market has downsized the extent of future cuts as the economy is just not lying down," Padhraic Garvey, regional head of research, Americas, at ING. "Confidence may be down, but the U.S. economy continues to spend and make things practically as normal."

"Importantly, upward pressure on market rates has been in longer tenors, not shorter ones. The shorter tenors are standing pat as the Fed is likely done, and that is coming from the significant easing in inflation data."

The Atlanta Federal Reserve's GDPNow forecast model suggested the U.S. economy is likely to grow at a 5.8% annualised rate in the third quarter, up from previous forecast of 5%.

In currency markets, the dollar lost some of its shine on Friday, but still managed to hold recent gains after hitting a six-week top.

The Japanese yen regained posture, up 0.3% to 145.35 per dollar, having been hammered this week to a nine-month low of 146.56 per dollar as yield differentials between U.S. and Japan widened.

It, however, still neared levels that sparked an intervention by Japanese authorities late last year.

The euro wallowed near its five-week low at $1.0876, down 0.6% for the week, while the risk sensitive Australian dollar broke a key support level overnight and was last at $0.6417.

Elsewhere, oil prices were marginally higher. Brent crude futures rose 0.1% at $84.24 per barrel and U.S. West Texas Intermediate crude futures also increased 0.3% to $80.64.

The gold price was slightly higher at $1,893.6 per ounce.