Asian stocks rise as yen slips on policy easing hopes

Monday, 4 October 2010 21:53 -     - {{hitsCtrl.values.hits}}

HONG KONG, (AFP) - Asian stocks rose Monday as traders followed last week’s advances in New York while the dollar edged up against the yen on expectations Japan will announce measures to pump more money into the economy.

And the European single currency held onto recent gains against the yen and dollar after China’s premier at the weekend gave his backing for the eurozone.

Hong Kong rose 1.36 percent, Tokyo added 0.87 percent and Sydney was up 1.35 percent, while Seoul was 0.54 percent higher.

Chinese markets were closed for a public holiday.

On Wall Street the Dow ended Friday 0.39 percent higher on data showing consumer spending, which is key to driving the US economy, rose 0.4 percent in August on month, better than the forecast 0.3 percent.

That was combined with news of a lift in construction spending.

Japanese exporters were boosted by a weaker yen as the Bank of Japan holds a policy meeting in which it is expected to reveal further monetary easing measures. The meeting ends on Tuesday.

The dollar rose to 83.72 yen in Tokyo morning trade from 83.25 yen in New York late Friday while the euro climbed to 115.00 yen from 114.78, hitting the highest level since May.

The yen is also being sold on expectations the BoJ might step back into the currency markets again, two weeks after its first intervention since 2004.

The euro Friday moved to around 1.38 dollars at one point in New York, its highest level in more than six months, on speculation the US Federal Reserve will also step up stimulus spending to sustain recovery in the US economy.

But it eased back slightly to 1.3754 dollars in Tokyo morning trade from 1.3787 as profit-takers moved in.

Its recent strength “put the euro at an attractive level for profit-taking, which should put the brakes on further gains for the rest of today,” a dealer told Dow Jones Newswires.

However, the euro has been kept buoyant by comments from China’s premier Wen Jiabao that Beijing would support debt-laden Greece and other struggling eurozone nations.

Speaking in Athens on Saturday he said: “China will make a big effort to support the eurozone economy and Greece... China will participate in the purchase of new Greek bond issues.”And on Sunday he added China would “support the stability of the euro” and would “not reduce the amount of European bonds that are part of the Chinese foreign exchange reserves”.

Yuzo Sakai, manager of FX business promotion at Tokyo Forex and Ueda Harlow, said: “With all the attention that’s on Chinese policy, remarks like this can’t help but give the euro some support.”On oil markets New York’s main contract, light sweet crude for November delivery, slipped six cents to 81.52 dollars a barrel.

Brent North Sea crude for delivery in November, eased a cent to 83.74 dollars.

Gold opened at 1,316.50-1,317.50 US dollars an ounce in Hong Kong on Monday, up from Thursday’s closing price of 1,311.50-1,312.50 dollars. Financial markets were closed in Hong Kong Friday.

The precious metal jumped to a record 1,320.70 dollars in London on Friday as dealers made the most of the weaker dollar while also looking for a safe haven during times of financial uncertainty.