Asian shares find relief in Wall St rally

SYDNEY (Reuters) - Asian stocks bounced on Tuesday as a rally in U.S. financial shares helped Japan break a 10-session losing streak, while also reversing a little of the recent safe-haven rush into the yen.

Helping was upbeat news from Singapore, as economic growth in the trade hub climbed 20.4 percent annualised in the three months to June, putting an end to four quarters of contraction.

Analysts said other export-dependent Asian economies were also expected to see improved second quarters, but questioned whether improvements can be sustained amid still weak consumer demand in the region's major Western markets.

Unease ahead of key data on U.S. retail sales and a slew of U.S. corporate earnings including banking giant goldman Sachs (GS.N), was enough to keep commodity prices subdued and oil pinned around $60 a barrel.

"Market sentiment has improved slightly compared to a few days ago, but we still need to see the actual numbers of U.S. results," said Mitsuru Sahara, chief manager at Bank of Tokyo-Mitsubishi UFJ.

Japan's Nikkei average .N225 was up 2.2 percent, a welcome break from nine straight session of losses which had seen it sink 11 percent from its late-June peak .T. MSCI's measure of stocks elsewhere in the Asia-Pacific .MIAPJ0000PUS gained 2.2 percent.

The rise tracked Monday's 2.5 percent rally in the S&P 500 .SPX and owed much to a single banking analyst.

In a change of mood, influential Wall Street analyst Meredith Whitney upgraded Goldman Sachs Group Inc (GS.N) to a "buy" on Monday, saying bank shares were in for at least a short-term gain of 15 percent. The S&P Financial Index .GSPF rose 6.5 percent as a result, while Goldman rose 5.3 percent.

"After a recent bearish run, the market has been looking an opportunity to rebound, and the analyst comments on the financial sector fit the bill," said Yutaka Miura, senior technical analyst at Mizuho Securities in Tokyo.

Also helping sentiment was a report from the Wall Street Journal that the U.S. government was in advanced talks to help embattled CIT Group (CIT.N), one of the nation's major lenders to small and medium sized business.

Still, no deal was certain, the WSJ said, and sources told Reuters the Federal Deposit Insurance Corp was opposed to granting CIT access to a government guarantee.

YEN OFF HIGHS

The tentative pick up in stocks seemed to lessen the need for safe havens like the Japanese yen, which eased across the board.

The dollar inched up to 92.94 yen, after touching a five-month low of 91.73 on Monday. The euro firmed to 129.95 yen, from a trough around 127.95.

The single currency was steady on the dollar around $1.3982, in the middle of a range that has held for over a month. Against a basket of major currencies, the U.S. dollar .DXY was down 0.06 percent at 80.083.

The Australian dollar got a lift to $0.7839 after a surprisingly strong survey of Australian business conditions was seen as lessening the need for further cuts in interest rates.

The survey of over 400 firms from National Australia Bank (NAB.AX) showed a marked pick up in sales and profits, along with a record improvement in employment intentions.

Investors are now awaiting data on U.S. retail sales and producer prices later on Tuesday. Sales are seen rising 0.4 percent in June, and by 0.5 percent excluding autos.

"We expect most indicators should continue to show less negative to slightly positive growth, reflecting the slow-moving recovery underway," said Merrill Lynch in a note to clients.

(Writing by Wayne Cole; Editing by Kim Coghill)