GLOBAL MARKETS-Asian shares hit nearly 4-wk high, dollar falls on Bernanke's comments

Thu Jul 11, 2013 2:39am EDT

* Euro, yen and Australian dollar gain against the greenback
    * Asian shares head for biggest one-day rise in 10 months
    * U.S. Treasuries prices climb in Asia
    * Copper jumps 3.2 pct to 3-week high, gold also hits 3-week
high
    * For a wrap up on Asian markets, please click on
 

    By Dominic Lau
    TOKYO, July 11 (Reuters) - Asian shares hit a near four-week
high on Thursday and the dollar extended losses on comments by
Federal Reserve Chairman Ben Bernanke that monetary stimulus
would still be needed for the foreseeable future.
    European shares were expected to shoot higher, with London's
FTSE 100 seen opening up as much as 1.6 percent and
Germany's DAX up as much as 1.3 percent. The S&P 500
index futures rose 1.1 percent.
    Financial markets have recently sold off on concerns that
the Fed may begin to scale back its $85 billion a month
bond-buying programme as soon as September.
    But Bernanke's remarks, which played down the strength of
last week's June payrolls report, prompted investors to reassess
the risk of an early end to the Fed's programme. They cut long
dollar positions and sent U.S. Treasuries higher.
    The dollar index dipped 0.2 percent, extending
Wednesday's 1.8 percent fall - a magnitude not seen since
2008-2009 at the height of the global financial crisis.
    "I was pretty shocked with this selloff this morning.
Obviously, Bernanke kicked it all off, but it was a bit of a
delayed reaction," said Bart Wakabayashi, head of forex at State
Street Global Markets in Tokyo.
    "I'm hearing there were some margin calls, stop losses
triggered there, and it moved down, so it seems like it's pretty
thin and maybe some Asian players were trying to unwind their
dollar longs.
    "But it does seem like a bit of an overreaction. Having said
that, it's a bit surprising, all of a sudden, the change in the
tone of Bernanke, so it's a whole new world all of a sudden."
    The euro surged 1.8 percent after earlier hitting a
three-week high of $1.32085. Against the yen, the dollar eased 1
percent after falling to a two-week low of 98.20 yen.
    Citi said the dollar selloff offered an opportunity to buy
on dip given the strength in the U.S. economy in the near term.
    Commodity currencies also jumped against their U.S. peer
with the Australian dollar climbing as high as $0.9306,
putting further distance from a 34-month trough of $0.9036
plumbed just last week.
    The Australian dollar was also aided by a surprise increase
in Australian employment in June, a result that may lessen the
chance of the central bank lowering interest rates further in
the short-term. 
    
    
    RELIEF RALLY
    "Those who had expected that the Fed's tapering could start
as early as September were relieved that it would come later
than that," said Kyoya Okazawa, head of global equities at BNP
Paribas in Tokyo.
    MSCI Asia-Pacific ex-Japan index jumped 3
percent, hitting a near four-week high and on track for its
biggest one-day rise in 10 months, while Seoul and Thai
stocks rose 2.9 and 3.2 percent, respectively.
    China's CSI300 index surged 4.6 percent, buoyed by
a report in official media that financing rules may be partially
relaxed for real estate firms. 
    But as the yen strengthened, Tokyo's Nikkei share average
 underperformed other Asian markets, up 0.4 percent.
    The Bank of Japan kept its monetary policy steady but said
an economic recovery was underway, its most optimistic view in
2-1/2 years reflecting the positive impact of a weakening yen
and its massive stimulus. 
    Underscoring the improving sentiment, Japan's core machinery
orders rose 10.5 percent in May from the previous month.
 
    The Bank of Korea also on Thursday raised economic growth
forecast this and next year as it held the benchmark interest
rates steady. 
    
    COMMODITIES HIGHER
    Copper prices gained 3.2 percent to exceed $7,000 a
tonne, hitting a three-week high and extending the previous
session's 1.4 percent rise as the dollar softened.
    Gold climbed 2.4 percent to a three-week high and was
on track for a fourth straight day of gain.
    U.S. crude oil prices added 0.7 percent to their
highest level since March 2012 and after Wednesday's 2.9 percent
jump, their biggest one-day rise in more than two months as U.S.
data showed the biggest two-week decline on record in oil
stockpiles.
    Yields on benchmark 10-year U.S. Treasuries 
eased 11 basis points to 2.5606 percent in Asian trade, sharply
off a 23-month peak of 2.755 percent touched on Monday after
Friday's stronger-than-expected payrolls data.
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