* MSCI Asia ex-Japan hits 4-month lows, bird flu, N.Korea
* Nikkei soars to highest since August 2008
* Yen dives broadly in early Asia, down more than full yen
* Weak yen pushes Tokyo gold futures to near all-time high
* European stocks likely edge higher
By Chikako Mogi
TOKYO, April 8 The yen tumbled while Japanese
stocks and government bonds rallied on Monday as the Bank of
Japan lost no time embarking on its ambitious stimulus drive,
but weak U.S. jobs data and regional risks such as North Korea
weighed on other assets.
European markets were likely to inch higher, with financial
spreadbetters predicting London's FTSE 100, Paris's
CAC-40 and Frankfurt's DAX to open as much as
0.5 percent higher. U.S. stock futures were up 0.1
percent to suggest a firm Wall Street open.
The MSCI's broadest index of Asia-Pacific shares outside
Japan fell as much as 0.5 percent to a
four-month low before trimming some losses to fall 0.3 percent.
Shanghai shares led the decline, after falling sharply
to a 3-1/2-month low earlier as bird flu worries hit
tourism-related sectors and the property sector lost ground on
more sales curbs.
South Korean shares dipped to new four-month lows
and the South Korean won fell to its weakest level in
more than eight months of 1,139.6 against the dollar, as
increasingly strident rhetoric by North Korea raised concerns
that Pyongyang may conduct a nuclear test or a missile launch
Friday's weaker-than-expected U.S. nonfarm payrolls report
raised worries about slowing growth momentum and weakening
demand from the world's largest economy.
But any bearishness toward the dollar was overwhelmed by
speculators squarely focusing on the prospect of a sustained
period of yen weakness as the BOJ set about implementing the
world's most intense monetary stimulus.
"The oil markets are currently enjoying the support of
upcoming liquidity after the BOJ announcement last week, but
they are still digesting the disappointing jobs data from the
U.S.," said Ker Chung Yang, senior investment analyst at Phillip
Futures in Singapore.
Brent crude oil rose 0.4 percent to $104.56 a barrel
after touching an eight-month low on Friday on worries about
weakening fuel demand in the U.S. and U.S. crude futures
inched up 0.2 percent to $92.88.
The BOJ conducted its first government bond buying operation
on Monday since announcing monetary easing on a stunning scale,
saying it will buy one trillion yen ($10.3 billion) of Japanese
government bonds of between five and ten years maturity, and 200
billion of bonds with maturities exceeding 10 years.
The dollar jumped a full yen in early Asian trading to hit
98.85 yen, the highest since June 2009, while the euro
climbed as far as 128.42 yen, its highest since
January 2010. The Aussie dollar soared to 102.34 yen,
the highest since July 2008.
Japan's Nikkei stock average jumped as much as 3.1
percent to its highest since August 2008 earlier, before
shedding some gains.
"The BOJ's bazooka has sparked the buying of Japanese
stocks, especially domestic sectors, like real estate," said
Yasuo Sakuma, a portfolio manager at Bayview Asset Management.
JAPAN INVESTORS KEY TO YEN TREND
Traders saw the market taking the dollar through the 100-yen
level as early as this week, and could aim for 102-103 yen in
coming weeks. The dollar last hit 100 yen in April 2009. By late
morning in Asia, however, the yen had steadied slightly from its
The BOJ promised last Thursday to inject about $1.4 trillion
into the economy in less than two years, in a radical gamble to
beat Japan's deep-rooted deflation.
"The weak yen trend driven by expectations for aggressive
BOJ easing remains firmly in place, and there now seems to be a
strong conviction by market players that the yen will continue
to weaken, with the 100 yen seen only as a transitional point,"
said Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo.
"Aside from something psychological, there isn't any reason
to stop the dollar at 100 yen. The way the yen is sold despite
the weak U.S. jobs data, there is really no reason to buy the
yen right now," he said.
With the key U.S. jobs data out of the way, Yunosuke Ikeda,
senior currency economist at Nomura Securities, saw investors
being more comfortable taking long-term positions that would see
the dollar/yen rate climb over a sustained period.
And Japanese institutional investors will hold key to the
sustainability and pace of yen selling, as they were seen
mulling removing currency hedges later this year if signs emerge
of slowing accommodative monetary policy in the United States
and if Japanese stocks continued to rally on hopes for
structural reforms that would help spur growth in Japan.
"The BOJ's easing is squashing superlong Japanese government
bond yields, which raises speculation that Japanese life
insurers will shift some of their funds to unhedged foreign bond
buying to some extent," Ikeda said.
The yen's weakness on the back of the BOJ's reflationary
commitment bolstered Japanese gold futures by almost 5
percent to 5,025 yen ($51.71) per gram, just below its all-time
high of 5,081 yen hit in early February.
Spot gold fell 0.3 percent to $1,576.74 an
"People are really pulling funds out of gold for better
investments such as equities and real estate in emerging
economies," said Joyce Liu, investment analyst at Phillip
London copper rebounded, up 0.6 percent to $7,453 a tonne,
after dropping for three consecutive weeks, although the bleak
U.S. jobs report for March was likely to keep a lid on prices.