* Yen's slide halts just before 100 to dollar
* BOJ action keeps global bond yields near lows
* Benign China inflation data boosts copper sentiment
* U.S. stocks reflect earnings expectations
NEW YORK, April 9 The yen rallied on Tuesday,
snapping a three-day decline against the dollar as it neared 100
to the U.S. currency, while expectations for modest growth in
corporate earnings capped stocks and overshadowed a fall in
The Japanese currency weakened to 99.66 to the dollar, using
Reuters data, the greenback's strongest level against the yen
since May 2009, before the sell-off in the yen stalled.
Analysts believe it is only a matter of time before the
dollar sails past the 100 yen mark.
"Given the breadth of yen bearishness, any reprieve would
likely encourage investors to re-establish short yen positions
at more favorable exchange rates," said Joe Manimbo, senior
market analyst at Western Union Business Solutions in
Tuesday's dollar selling left the greenback down 0.5 percent
at 98.92 yen.
The U.S. currency has still gained around 7 percent against
the yen since the Bank of Japan unveiled a massive stimulus
program last Thursday involving large purchases of long-term
Japanese government bonds.
The BOJ's bold measures have had a major impact on the
world's main debt markets, sending Japanese government yields
down sharply and spurring a search for higher-yielding assets,
which has caused yields to fall on U.S. and euro zone bonds.
"Markets are increasingly focused on the notion that larger
JGB purchases, at longer maturities, by the BOJ could push
Japanese domestic long-term investors elsewhere," said Vassili
Serebriakov, strategist at BNP Paribas in London.
However, yields on highly rated euro zone bonds moved up
from record lows on Tuesday as investors began to position for
fresh government debt auctions.
German 10-year bond yields were higher at 1.263 percent,
having hit 1.2 percent on Friday, their lowest
level since mid-2012 before European Central Bank President
Mario Draghi promised to do whatever it took to save the euro.
U.S. government debt prices edged higher on Tuesday in
advance of a $32 billion auction of a new three-year note issue,
which was the first part of the $66 billion in total supply of
longer-dated debt this week.
Benchmark 10-year Treasury notes were up 3/32 in price,
yielding 1.7348 percent, down 1.4 basis points from late on
Equity markets were mostly higher earlier in the global day
as investors hoped for more accommodative monetary policy from
China following benign inflation data, though they began to pare
gains into U.S. trading.
MSCI's world equity index, which tracks
share prices in 45 countries, was up 0.4 percent. Europe's FTSE
Eurofirst 300 index finished down 0.1 percent with
concerns about a weak first-quarter earnings season outweighing
prospects for continued strong metals demand from China.
U.S. stocks stalled midway through the New York session.
The Dow Jones industrial average was up 21.23 points,
or 0.15 percent, at 14,634.71. The Standard & Poor's 500 Index
was up 1.62 points, or 0.10 percent, at 1,564.69. The
Nasdaq Composite Index was up 1.74 points, or 0.05
percent, at 3,223.99.
The liquidity stemming from the Federal Reserve's
ultra-loose monetary policy means stocks will face more of a
"rolling correction" among sectors than a large sell-off, said
Dan Veru, chief investment officer at Palisade Capital
Management LLC in Fort Lee, New Jersey.
"I'm expecting us to be in this sideways period where you'll
have some outperforming sectors that might be subject to
profit-taking and some underperforming sectors that might get
attention," Veru said.
Alcoa Inc, the first Dow component to release
results, reported a higher quarterly profit but
lower-than-expected revenue after the bell on Monday. Shares of
the largest U.S. aluminum producer fell 0.6 percent to $8.34.
Weak demand in Europe was a key drag on Alcoa's results, and
also hurt March sales at Volkswagen with shares in
the German carmaker dropping 2.9 percent.
China's annual consumer inflation cooled in March as food
prices eased from nine-month highs and producer price deflation
deepened, data showed on Tuesday, leaving policymakers room to
keep monetary conditions easy and nurture a nascent recovery.
The Chinese data underpinned demand for copper, which
climbed to a two-week high of $7,620 a tonne on the London Metal
Exchange before paring slightly to trade at $7,610 a
tonne, up 2.1 percent.
Brent oil also gained on the Chinese data, and a stalemate
in talks between Iran and Western nations over its nuclear
program and rising tensions on the Korean peninsula also
Brent rose 0.2 percent to $104.86. U.S. oil futures
were little changed at $93.35 a barrel and