GLOBAL MARKETS-Shares edge up, yen gains after BOJ easing

* Oil prices drop on signs of increased supply
* Equities helped by U.S. housing data
* BOJ expands asset buying but impact muted

By Ryan Vlastelica
NEW YORK, Sept 19 (Reuters) - U.S. and European shares edged
higher on Wednesday after two days of declines, helped by U.S.
housing data, while the yen rose after a brief decline on the
Bank of Japan's decision to ease monetary policy further.
Oil prices fell 3 percent as the market digested comments
from Saudi Arabia that it would take action to keep prices in
check. Prices also weakened on U.S. data that showed crude
stocks climbed far more than expected.
Recent accommodative policies from the Federal Reserve,
European Central Bank and now Japan's central bank are seen as
limiting downside, but concerns persist about Europe's debt
crisis and slowing growth.
Those concerns limited Wednesday's equities gains and pushed
the euro back towards $1.30 against a mildly stronger dollar.
"The feel-good factor from the Bank of Japan's move has worn
off quickly and it's back to European matters," said Investec
strategist Phillip Shaw.
Japanese stocks rallied to four-month high after the BOJ
said it would increase its asset buying and loan program,
currently its main monetary easing tool, by 10 trillion yen
($127 billion) to 80 trillion.
European shares rose 0.2 percent. The MSCI index of
global stocks also was up 0.2 percent.
U.S. existing home sales rose by their fastest pace in two
years, the latest indication that a recovery in the housing
market was gaining traction. An index of housing
shares rose 2 percent.
The Dow Jones industrial average was up 16.29 points,
or 0.12 percent, at 13,580.93. The Standard & Poor's 500 Index
was up 0.70 point, or 0.05 percent, at 1,460.02. The
Nasdaq Composite Index was down 4.86 points, or 0.15
percent, at 3,172.94.

The Bank of Japan action helped to offset concerns about
tensions between Japan and China over a disputed group of
islands in the East China Sea.
The dollar jumped to 79.21 yen, its highest since
Aug. 22, after the BOJ's decision. It last traded at 78.36 yen,
down 0.6 percent on the day.
In the bond market, the benchmark 10-year U.S. Treasury note
was up 11/32, with the yield at 1.7718 percent.
Oil prices sank to $108.98. Brent is down about 7
percent so far this week, though it remains up more than 11
percent over the past three months.
Gold, which has a twin appeal as a safe-haven asset
and inflation hedge, shrugged off the concerns to sit at a 6-1/2
month high of $1,772.49 an ounce.
China's economy remains a major worry for global markets.
The government said on Wednesday the export outlook was grim and
demand may be weaker in the next few months than it has been so
far this year.
"With the European Central Bank, the U.S Federal Reserve and
now the Bank of Japan - the world's major central banks - moving
to ease, there will now be expectations for the PBOC (People's
Bank of China) to follow suit," said Jackson Wong, Tanrich
Securities' vice-president for equity sales.