HONG KONG -- Asian bond spreads tightened considerably on Wednesday as stronger-than-expected quarterly results at several US regional lenders sparked hopes the impact of the credit crunch on the global financial sector was easing.

Investors were also relieved after Lehman Brothers' chief executive officer said "the worst is behind us," becoming the third investment bank head to strike an optimistic note about financial markets this month, dealers said.

Still, caution remained ahead of earnings from JPMorgan Chase later in the day, with those from Merrill Lynch due out on Thursday and Citigroup on Friday.

The iTRAXX Asia ex-Japan high-yield index, a key measure of risk aversion, tightened by around 15 basis points (bps) to 552.

"Everything is a bit firmer on the positive tone from the US markets yesterday, but I'm still very skeptical about it. I'm not sure if we are completely done with negative news, especially in the financial sector," said a Hong Kong-based trader.

Asian stocks rose on Wednesday, tracking gains on Wall Street after several regional banks, including US Bancorp and Regions Financial Corp., posted better-than-expected earnings and expressed confidence they could weather credit losses from the housing slump.

Spreads tightened across the region, with five-year credit default swaps -- insurance-like contracts that protect against defaults -- for Swire Pacific tightening to 120-130 basis points, according to another trader.

That was about 20 bps tighter than before its Swire Pacific MTN Financing Ltd. unit sold $400 million in 10-year bonds on Monday.

Elsewhere, five-year Philippine CDS -- among the most actively traded debt in Asia outside of Japan -- moved in by nearly 10 basis points to 220/225.

PRIMARY MARKET REVIVAL?

Bankers said they were looking out for more evidence of a revival in primary bond issuance in the region following bond sales by Korea Southern Power Co. on Friday and Swire Pacific's unit.

Asian credit markets have rallied over the past month, with the iTRAXX high-yield index now down about 100 basis points from a record above 650 in mid-March.

Chinese containerboard maker Nine Dragons Paper Holdings is among the companies said to be looking to tap global debt markets.

The paper company is in the middle of a global non-deal road show that started on April 7 and will end in Los Angeles later on Wednesday, a source familiar with the plan told Reuters last week.

Speculation on a deal intensified after Standard & Poor's Ratings Services and Fitch Ratings initiated coverage of Nine Dragons on Monday, both with "BBB-", or the lowest investment-grade rating. (Reporting by Rafael Nam; editing by Alan Raybould)