GLOBAL MARKETS-Shares edge up after BOJ easing, oil down again
* Oil prices drop again on signs of increased supply * U.S. equities tick higher, helped by housing data * BOJ expands asset buying but broader impact muted By Ryan Vlastelica NEW YORK, Sept 19 (Reuters) - U.S. and European shares rose o n W ednesday 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 more than 3 percent and extended their recent losses on 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. Equities have struggled for direction in recent sessions. Recent accommodative policy moves 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 above $1.30 against a mildly stronger dollar . "The Bank of Japan is following a similar path as the ECB and Fed, which shows how sluggish their economy is, though it shouldn't have much impact outside Japan," said Brad Thompson, managing director at Frost Investment Advisors in San Antonio, which has about $9 billion in assets. "What's more important now is whether Spain will be able to come to an agreement on fiscal reform." 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 closed 0.4 percent higher. The MSCI index of global stocks rose 0.44 percent. In U.S. economic news, existing home sales rose at their fastest pace in two years, the latest indication a recovery in the housing market was gaining traction. An index of housing shares rose 2.2 percent. The Dow Jones industrial average was up 49.13 points, or 0.36 percent, at 13,613.77. The Standard & Poor's 500 Index was up 5.38 points, or 0.37 percent, at 1,464.70. The Nasdaq Composite Index was up 10.37 points, or 0.33 percent, at 3,188.17. The Bank of Japan action helped somewhat to offset concerns about tensions between Japan and China over a disputed group of islands in the East China Sea, as it could cushion any negative impact to Japan's exports. The dollar jumped to 79.21 yen, its highest since Aug. 22, after the BOJ's decision. It last traded at 78.39 yen, down 0.4 percent on the day. In the bond market, the benchmark 10-year U.S. Treasury note was up 8/32, the yield at 1.784 percent. Brent crude oil prices sank 3.6 percent to $107.94. Brent is down about 7.5 percent so far this week, though it remains up 10 percent over the past three months. Gold, which has a twin appeal as a safe-haven asset and inflation hedge, shrugged off the concerns and held near 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 o n W ednesday 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.
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