GLOBAL MARKETS-Shares up on US earnings, euro steadies

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* Nikkei opens up 1.2 pct, yen rise a worry

* Euro steadies after Merkel comments

* Oil prices firmer on mid-east concerns

HONG KONG, July 19 (Reuters) - Asian shares rose on Thursday as strong corporate profits from U.S. bellwethers allayed fears of a slowdown in earnings while the euro steadied after being hit by reported comments from German Chancellor Angela Merkel that rekindled fears about the euro zone debt crisis.

Japan's Nikkei was up 1.2 percent although market players warned that appreciation in the yen could limit gains as shares of exporters such as car makers and electronics manufacturers come under pressure.

On Wall Street, the S&P 500 hit its highest level since early May helped by quarterly numbers from bellwethers such as Intel Corp and Honeywell and housing starts data that came in better than expected.

But continued strength in "safe haven" assets such U.S. treasuries underscored persistent concerns about the speed of economic growth, keeping bond yields near historic lows.

U.S. Federal Reserve Chairman Ben Bernanke repeated in congressional testimony on Wednesday the central bank's pledge to act if the economy needed it as he underscored his concerns, specifically in the job market.

Bernanke downplayed risks of a double-dip recession.

10-year Treasury yields were littled changed at 1.48 percent close to the record low of 1.442 percent hit last month. The dollar bought 78.77 yen, moving back toward a one-month low of 78.68 yen hit on Monday.

The euro was last at $1.2276 up from its overnight low of $1.2216, which came after comments from Merkel raised fears a solution to Europe's debt crisis was not yet in sight.

"We have not yet shaped the European project in a way that we can be sure that everything will turn out well, we still have work to do," Merkel said in an interview posted on her Christian Democratic Union party's website, according to a media report.

Oil prices remained firm after hitting a seven-week peak on Wednesday as violence in Syria and tensions with Iran reinforced geopolitical fears.

Brent crude futures were up 0.3 percent to $105.42 a barrel while U.S. crude was 0.1 percent higher at $89.97 a barrel.

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