* Yen falls against dollar on BOJ report
* World stock indexes up slightly; S&P 500 edges lower
* Investors digest news on Italy elections
By Caroline Valetkevitch
NEW YORK, Feb 25 The yen fell against the dollar
on Monday on higher prospects of unprecedented monetary easing
in Japan, while an index of world stocks pared gains as
investors digested projections for the outcome of Italy's
Pressuring stocks and the euro, a projection by Italian TV
showed the centre-right party was leading elections for the
Earlier, stock and other investors cheered exit poll results
from Italy's weekend election that showed the centre-left,
pro-reform Democratic Party was in the lead.
The outcome of the election is expected to hold the key to
whether the current reform program will continue uninterrupted
in the euro zone's third-largest economy. A victory by the
center-right coalition could cause instability in one of the
euro zone's largest economies as Italy copes with a deep
recession and weak growth.
The MSCI world equity index was up 0.2
percent after three consecutive weekly losses as evidence of
sluggish global growth mounted. Italy's main FTSE MIB
stock market index was up 0.7 percent after rising more than 3
On Wall Street, the Dow Jones industrial average was
unchanged at 14,000.57. The Standard & Poor's 500 Index
was up 0.78 point, or 0.05 percent, at 1,516.38. The Nasdaq
Composite Index was up 8.31 points, or 0.26 percent, at
In the foreign exchange market, the yen fell for a second
straight session against the dollar on news that Japan's prime
minister is likely to nominate Asian Development Bank President
Haruhiko Kuroda as the next central bank governor to step up his
fight to finally rid the country of deflation.
The dollar shot up to 94.76 yen on Monday, a high not
seen since May 2010. The U.S. currency last traded at 94.08 yen,
up 0.7 percent on the day, according to Reuters data.
Japanese Prime Minister Shinzo Abe won a big election
victory in December, promising to revive the fortunes of an
economy stuck in the doldrums for most of the past two decades.
Abe's repeated calls for more forceful central bank action
are largely behind the currency's nearly 20 percent fall against
the dollar since November, when Abe began calling for bolder
"The news all but ensures that the BoJ will continue on an
expansionary path of monetary easing to help kick-start the
world's number three economy," said Omer Esiner, chief market
analyst at Commonwealth Foreign Exchange in Washington, D.C.
"Consequently, the yen remains vulnerable to continued losses
across the board," he said.
The euro last traded at 123.74 yen, up 0.5 percent
on the day, but sharply below the global session high of 125.25
yen, according to Reuters data.
The euro briefly traded flat after the latest poll and last
traded at $1.3204, up 0.1 percent on the day on the day.
That is far below the global session peak of $1.3318.
Investors also are looking ahead to testimony by Federal
Reserve Chairman Ben Bernanke to Congress on Tuesday and
Wednesday, in which he is expected to downplay the idea that the
U.S. central bank could prematurely end its current massive
monthly bond-buying program.
In the bond market, the benchmark 10-year U.S. Treasury note
was up 6/32 in price, with the yield at 1.94