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Asian Shares Rise as Dollar Jumps vs Yen
SINGAPORE—Asian shares rose on Thursday, led by a near 2 percent gain for Japan's Nikkei, and the dollar jumped against the yen, amid signs the risk aversion that seized global markets over the past week may be starting to wane.
Oil edged up, extending the 2 percent surge of a day earlier on falling U.S. crude stocks, but worries about slowing growth in the United States continued to gnaw at investor confidence.
"The recent slide in global markets appears to have already been factored in, and we are seeing a recovery begin to take hold, although the rebound will still be a cautious one," said Lee Woo-hyun, an analyst at Kyobo Securities in Seoul.
"The dilemma is the U.S. economy. The recent data has not been good, although it's still too early to conclude that the economy is weak as a result."
Financial bookmakers in London forecast the FTSE 100 index to open up around 0.3 percent.
The weaker yen boosted shares in some Japanese exporters, such as electronics components maker Kyocera Corp., while regional steel makers gained on hopes that continuing demand from developing countries would boost earnings.
The yen initially rose, after a Federal Reserve report pointing to slowing economic growth and a negative assessment of the U.S. housing market from a large home builder.
But it later fell back, with traders saying the rise in Japanese stocks had prompted some short-term players to reverse bets for a deeper drop in the dollar, euro and other currencies versus the yen.
"The market is glued to stock prices at the moment," said a dealer at a U.S. brokerage in Tokyo. "Investors are trying to figure out how much risk appetite will return to the market."
The yen had surged in the past week as worries about the U.S. economy and steep falls in world equity markets sparked a rapid unwinding of so-called carry trades, in which investors borrow low-yielding yen to buy higher-yielding assets.
Global stock markets, as measured by MSCI's world index, remain down more than 4.5 percent from levels on Feb. 26, just before a sell-off triggered by steep losses for Chinese stocks and jitters about the health of the U.S. economy.
Tokyo's Nikkei rose 1.9 percent, its biggest one-day percentage gain since October, to close above 17,000 for the first time this week.
Gains were spurred by a rally in the futures market, where investors bought back the March contract ahead of its Friday settlement.
MSCI's broadest index of shares elsewhere in Asia was up 0.8 percent at 0610 GMT.
South Korea's benchmark index closed up 0.9 percent and Taiwan stocks finished 1.2 percent higher, but Australia's S&P ASX 200 was flat.
Singapore shares were trading up 1.6 percent and Hong Kong's Hang Seng rose 0.7 percent.
Steel stocks gained, buoyed by hopes emerging nations such as China will continue investing heavily in infrastructure, with Japan's top steel maker, Nippon Steel Corp., rising 4.5 percent and South Korea's POSCO up 2.5 percent.
Japanese chip stocks were boosted after brokerage Goldman Sachs raised its rating on Toshiba Corp. to buy, saying prices of NAND flash memory chips would likely bottom out in the current quarter. Toshiba rose 5 percent.
The dollar traded around 116.70 yen at 0610 GMT, up around 0.6 percent on the day and more than 1 yen above the day's low of 115.55 yen.
The euro climbed to around 153.70 yen up around 1 percent from the day's low. The single currency was little changed against the dollar around $1.3172.
Foreign exchange players were looking to U.S. jobs data on Friday for any signs of weakness that could stoke expectations of an interest rate cut and prompt further dollar selling.
Traders said the market had already factored in the European Central Bank raising interest rates by 25 basis points to a 5-˝ year high of 3.75 percent at its meeting later on Thursday.
In the Japanese government bond market, key March 10-year futures rose 0.04 point to 135.28, and 10-year yields slipped 0.5 basis point to 1.615 percent.
Energy and commodities markets were steady. U.S. oil rose 14 cents at $61.96 a barrel, gold inched up to trade around $652.65 an ounce and three-month copper on the London Metal Exchange edged higher after jumping 3 percent on Wednesday.
"It appears that most of the panic is over. The sell-off may have been a little too aggressive. In terms of fundamentals, there hasn't really been a huge change," said Gerard Burg, economist at National Australia Bank.
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