* MSCI Asia ex-Japan down 0.7 pct, N.Korea steps up rhetoric
* Nikkei recoups losses to turn higher on bold BOJ easing
* Yen slips on BOJ moves
* JGB 10-year yield hits near-decade low, JGB futures record
* Spot gold tumbles to 10-month lows as investors cover
* Bank of England, ECB seen standing pat
By Chikako Mogi
TOKYO, April 4 Japanese stocks and government
bonds rallied while the yen slipped more than 1 percent against
the dollar and the euro after the Bank of Japan took strong
easing steps on Thursday, but other Asian equities fell on
worries over the U.S. economy.
European markets were likely to extend losses, with
financial spreadbetters predicting London's FTSE 100,
Paris's CAC-40 and Frankfurt's DAX to open down
as much as 0.3 percent.
U.S. stock futures were up 0.2 percent, pointing to a
firm Wall Street open, a day after the Standard & Poor's 500
Index posted its biggest daily drop in over a month on
weaker-than-expected U.S. private sector hiring in March, and as
a services sector index missed forecasts.
Japan's Nikkei stock average recouped earlier losses
and rose 1.4 percent after the BOJ announced a sweeping monetary
expansion campaign that will include heavy investment in REITs
and ETFs, boosting reflationary stocks such as real estate firms
Ten-year JGB futures rose to a record high and the
10-year yield dropped to 0.490 percent, its
lowest since June 2003.
Elsewhere in Asia, however, the MSCI's broadest index of
Asia-Pacific shares outside Japan fell 0.8
percent as investors waited for Friday's nonfarm payrolls report
for further clues on the outlook for U.S. growth.
Growing tensions on the Korean peninsula also soured
sentiment. South Korean stocks .KS11> fell 1.3 percent, while
the South Korean won slid against the U.S. dollar.
North Korea barred entry to a joint industrial complex it
shares with the South for a second day on Thursday.
The United States said on Wednesday it would soon send a
missile defense system to Guam to defend it from North Korea, as
the U.S. military adjusts to what Defense Secretary Chuck Hagel
has called a "real and clear" danger from Pyongyang.
"Markets at this point look increasingly top-heavy, even if
the downside still seems anchored by reasonable earnings outlook
in the region," said Hirokazu Yuihama, a senior strategist at
Daiwa Securities in Tokyo.
"Asian bourses are coming under pressure from growing
uncertainty in Chinese property markets, worries about the euro
zone and the U.S. economy. North Korea's seemingly hardening
stance added to the already weakened sentiment, but as long as
there is no actual military confrontation, the Korean factor may
be temporary," Yuihama said.
BOJ EASING CHEERS MARKETS
The Bank of Japan decided on a radical overhaul of its
policy framework on Thursday, shifting its target when setting
monetary policy to base money from the current overnight call
rate. The central bank said it will bring forward the timing of
open-ended asset buying and extend the duration of government
bonds it buys in its easing program.
The dollar soared more than 1 percent to above 94 yen
and the euro also jumped over 1 percent to around 121 yen
, while the dollar gained 0.3 percent against a basket
of major currencies.
"The measures announced overall were bold, and more than
what had been expected for," said Hiroshi Maeba, head of FX
trading Japan for UBS in Tokyo, adding that the dollar's rise
was partly due to the fact some players had trimmed yen short
post ions before the meeting.
"All in all, the BOJ's steps today were enough to prompt
those shorting the dollar to unwind their positions. Whether the
dollar will rise further will depend on how overseas players
respond to the BOJ's moves and on the U.S. nonfarm payrolls due
Market expectations have been running high for Haruhiko
Kuroda to announce bold measures at his inaugural policy meeting
as BOJ governor.
The European Central Bank is expected to hold interest rates
steady on Thursday but could provide a dovish outlook on
interest rates, while the Bank of England is also unlikely to
take fresh easing steps at its meeting later on Thursday.
Oil futures recovered from sharp losses the day before, with
U.S. crude holding around $94.48 a barrel and Brent
adding 0.3 percent to $107.40.
"There is no shortage of oil in the United States or
anywhere else, this is very clear, and we can see that the
economic recovery is also not as good as we thought it was,"
said Ken Hasegawa, a commodity sales manager at Newedge in
Steep losses in pan-Asian shares outside Japan sparked a
sell-off in gold as investors covered the equities losses,
pushing spot gold down 1 percent at one point to a 10-month low
of $1,541.14 an ounce.