By Wayne Cole

SYDNEY (Reuters) - Asian shares rallied on Monday and U.S. stock futures recouped early losses as newly empowered retail investors turned their attention to precious metals, promising a respite to some hard-hit hedge funds.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.4% after four straight sessions of losses.

Japan's Nikkei added 1.2%, after shedding almost 2% on Friday, while Chinese blue chips gained 0.5% as the country's central bank injected more cash into money markets.

Futures for the S&P 500 edged up 0.3%, having been down as much as 1% in early action, while NASDAQ futures firmed 0.1%. EUROSTOXX 50 futures added 0.6% and FTSE futures 0.2%.

Dealers noted a shift in the headline-grabbing battle between retail investors and Wall Street that led hedge funds last week to trade the most stock in a decade amid wild swings in GameStop Corp.

Talk now was that silver was the new target for the retail crowd, as the metal jumped 6% to a six-month high, possibly limiting the need for distressed selling by stock funds.

Analysts cautioned this entertaining episode was really a sideshow compared with signs of a loss of economic momentum in the United States and Europe as coronavirus lockdowns bite.

Indeed, two surveys from China showed factory activity slowed in January as restrictions took a toll in some regions.

Neither was the news on vaccine rollouts positive, especially given doubts about whether they will work on new COVID strains.

"It is these considerations, not what is happening to a video game retailer day to day, that has weighed on risk assets," said John Briggs, global head of strategy at NatWest Markets. "So much of the market's valuations, risk in particular, is premised on the fact we can see a light at the end of the COVID tunnel."

Doubts have also emerged about the future of President Joe Biden's $1.9 trillion relief package, with 10 Republican senators urging a $600 billion plan.

The jitters in stocks caused only a brief ripple in bonds, with Treasury yields actually rising late last week, perhaps a refection of the tidal wave of borrowing underway.

A record $1.11 trillion of gross Treasury issuance is slated for this quarter, up from $685 billion the same time last year.

On Monday, U.S. 10-year yields had nudged up to 1.08% and nearer the recent 10-month top of 1.187%.

Higher yields combined with the more cautious market mood have seen the safe-haven dollar steady above its recent lows. The dollar index stood at 90.535, having bounced from a trough of 89.206 hit early in January.