* MSCI Asia ex-Japan rises 1 pct, Nikkei cuts earlier gains
* Yen hits multi-year lows vs dollar, euro and Aussie
* BOJ helps keep global bond yields low
* Benign China inflation data soothes sentiment
By Chikako Mogi
TOKYO, April 9 The yen fell to fresh multi-year
lows and Japanese stocks touched near five-year highs on Tuesday
as effects of the Bank of Japan's aggressive reflationary
campaign reverberated through markets, while Asian equities rose
on solid U.S. earnings.
European markets were likely to rise, with financial
spreadbetters predicting London's FTSE 100, Paris's
CAC-40 and Frankfurt's DAX to open as much as
0.7 percent higher. U.S. stock futures were up 0.1
percent, suggesting a firm Wall Street open.
The BOJ's bold measures sent Japanese government bond yields
down sharply across the curve, prompting a global drive in
search of higher-yielding assets and pushing sovereign bond
yields lower in the United States and the euro zone.
Some currency traders attributed the Thai baht's
surge to a 16-year high against the dollar to investors
borrowing yen cheaply to invest in higher-yielding assets in
Benign Chinese inflation data also boosted sentiment as it
kept hopes that an expansive monetary stimulus will stay in
place to support the world's second-largest economy, but
escalating tensions in the Korean peninsula took a toll on South
Korean shares and its currency.
The MSCI's broadest index of Asia-Pacific shares outside
Japan rose 1 percent, led by Australian shares
which gained 1.4 percent on rises in blue chip
financials and miners.
"It's hard to say which direction the market will go but I
think near term the biggest catalysts will be the results from
the U.S. earnings season," said Haris Khaliqi, research analyst
at Foster Stockbroking.
Alcoa Inc, the largest U.S. aluminium producer,
kicked off U.S. earnings on Monday, reporting an increase in
quarterly profit on Monday and easing concerns about corporate
results in the first three months of 2013.
South Korean markets were weighed by concerns over North
Korea, with Seoul shares capped after a fall and the
South Korean won < briefly dipping to a fresh 8-month
low of 1,145.3 per dollar earlier.
North Korea suspended its sole remaining major project with
the South on Monday, the Kaesong industrial park, amid
speculation that it will take some sort of provocative action -
another nuclear weapons test or missile launch.
China's annual consumer inflation eased to 2.1 percent in
March from February's 3.2 percent while producer price deflation
deepened, data showed on Tuesday.
"The lower inflation will greatly ease investors' concerns
that policymakers would begin to tighten monetary conditions,"
said Haibin Zhu, chief China economist at JPMorgan Chase in
The Australian dollar rose to a high of $1.0448
from around $1.0424, before drifting back. Australian assets are
sensitive to economic indicators out of China, as it is
Australia's largest export destination.
JAPAN STILL LEADS
The yen was expected to stay under pressure, while Japanese
shares were seen garnering sustained support from the
unprecedented scale of the stimulus unveiled late last week by
the new BOJ Governor Haruhiko Kuroda.
Japan's Nikkei stock average index struck its
highest since August 2008 in the morning, before profit taking
wiped out most of the early gains.
David Baran, co-founder of Tokyo-based hedge fund Symphony
Financial Partners, expected Japan's markets to perform in a
similar way to U.S. markets after the the U.S. Federal Reserve
first opted for quantitative easing four years ago with an asset
buying programme. Both the Standard & Poor's Index and
the Dow Jones industrial average have hit all-time highs
during the last couple of weeks.
The Nikkei, currently at around 13,200, remains far below a
lifetime high of 38,915.87 notched on Dec. 29, 1989.
Early in Asia on Tuesday, the dollar hit 99.67 yen
, its highest since May 2009, while the euro climbed as
far as 129.935 yen, its highest since January 2010.
The Aussie dollar soared to 103.81 yen, the
highest since July 2008.
Traders expect the dollar to trade at 100 yen as soon as
this week, as the reaction to the BOJ's strategy spreads.
"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.
Firmer stocks underpinned risk appetite in Asian credit
markets, tightening the spread on the iTraxx Asia ex-Japan
investment-grade index by 3 basis points.
But gold suffered, as investors ignored tension between the
two Koreas, and shifted funds to equities for better returns.
"I can say the chart point doesn't look good. The bond and
stock markets are more interesting than gold," said Ronald
Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
U.S. crude futures rose 0.4 percent to $93.75 a
barrel and Brent rose 0.6 percent to $105.24.