* Japanese shares rally after BoJ move, yen weakens
* MSCI World index has pre-EM selloff peak in sight
* European shares dip after recent gains
* Gold weakens, but crude oil rallies
By Ryan Vlastelica
NEW YORK, Feb 18 Stock markets around the world
edged higher in volatile trading on Tuesday following a fresh
round of stimulus from the Bank of Japan, though gains were
limited by some tepid data following a recent rally.
The Bank of Japan maintained its expansionary monetary
policy, extending special loan programs to help buoy economic
growth. The news lifted Japanese shares 3.1 percent, but
the rest of Asia was flat following action to
rein in lending in China and hawkish rate-rise comments in
"The move by the Bank of Japan is important as it shows how
central banks around the want world want to make sure economies
don't slip back into recession," said Wayne Kaufman, chief
market analyst at Rockwell Securities in New York. "That will be
an overriding factor in any trading."
The MSCI World index was up 0.3 percent.
Economic data pointed to continued struggles around the
globe, with German investor sentiment weaker and factory
activity in New York state slowing in February. Also in the
U.S., the February NAHB housing market index fell to 46 from 56
in January, following similarly weak reads last week on retail
sales and the labor market.
Investors have been looking to economic data to justify the
recent advance in equities, which has taken the S&P 500 back
near record levels despite the U.S. Federal Reserve trimming its
stimulus program in each of the past two months. The Fed will
publish the minutes of its latest meeting on Wednesday, and
market participants will scour the information for confirmation
that the slowing will continue at a steady pace.
"We're getting overbought in the short-term, so it wouldn't
be surprising to see a pause in stocks, especially since some of
the data has been lukewarm," Kaufman said.
The FTSEurofirst 300 fell 0.4 percent after rising
in eight of the last nine sessions. German Bund futures
rose 0.1 percent, while Greek bond yields hovered
around their lowest since the country's debt restructuring as
international lenders said they would return to Athens this week
to assess the delivery of economic reforms.
The Dow Jones industrial average was down 13.96
points, or 0.09 percent, at 16,140.43. The Standard & Poor's 500
Index was up 1.39 points, or 0.08 percent, at 1,840.02.
The Nasdaq Composite Index was up 24.80 points, or 0.58
percent, at 4,268.83.
The benchmark 10-year U.S. Treasury note was up
8/32, with the yield at 2.714 percent.
YEN LOSES GROUND
The big loser from the BoJ action and subsequent bank-led
Nikkei rally was the yen, which lost ground against all
of its major currency peers, with the dollar gaining 0.3
The Japanese action had helped "reverse the recent
dollar/yen bear trend" said Tom Levinson, currency strategist at
ING, adding he thought 102.85/95 yen resistance would hold for
The U.S. dollar index fell 0.2 percent against a
basket of currencies, while the euro rose 1.1 against the yen
to post a new February high.
After initially weathering a bout of profit-taking, gold
slid away from its near 3-1/2-month peak to fall 0.5 percent.
U.S. crude futures jumped 1.1 percent, boosted by
robust demand for heating fuel, as well as a weaker dollar and
supply disruptions in Libya. Brent crude rose 0.4
percent, nearing $110 a barrel.