* Tokyo's Olympic venue victory lifts Nikkei, dollar/yen
* Stronger-than-expected China data supports Asian shares
* Soft U.S. jobs data raise speculation Fed tapering may be
* Markets seen on edge until Fed policy meeting on Sept
* Oil prices near two-year high amid concerns over U.S.
By Hideyuki Sano
TOKYO, Sept 9 Japanese shares rallied and
the yen dropped on Monday after Tokyo won its bid to host the
2020 Summer Olympics, while Asian shares also gained on mildly
upbeat Chinese trade data that underscored signs of stability
in Asia's powerhouse.
The dollar licked its wounds and U.S. debt yields were off
two-year highs after a disappointing U.S. jobs report on Friday,
which raised speculation the Federal Reserve may minimise the
size of a likely reduction in stimulus many investors expect
later this month.
"The data was undoubtedly weak. I suspect the Fed will start
tapering this month but maybe they will just trim bond buying by
$5 billion a month for now," said a U.S. bond trader at a
Japanese bank. The Fed currently buys $85 billion of bonds per
Japan's Nikkei share average gained 2.2 percent,
hitting a one-month high as investors bet hosting the Olympics
would boost the economy -- from construction and higher prices
-- by 3 trillion yen ($30 billion) over the coming seven years.
"In the short-term, this (Olympics-bid win) will be positive
mainly through a boost on Olympic-related shares," said Ryota
Sakagami, chief equity strategist at SMBC Nikko Securities in a
"In the longer run, its impact depends on how much the
government can push for infrastructure investments and promotion
of tourism business but it is likely to be positive for the
Japanese economy and shares," he said.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 0.7 percent thanks to improved Chinese
trade figures released over the weekend.
Hong Kong shares rose 0.9 percent while South Korean
shares rose 0.8 percent, both hitting their highest
level in about three months.
Mainland Chinese shares also extended gains after positive
Chinese August inflation data added to optimism following solid
trade figures, with the CSI300 of the leading Shanghai
and Shenzhen A-share listings up 2.1 percent.
China's exports grew 7.2 percent in August, above market
expectations of a 6.0 percent rise from a year earlier.
China's consumer inflation held steady in August while
producer price deflation continued to ease, in another sign of a
Investors are bracing for more data from China including
industrial production and retail sales on Tuesday.
Investors are also grappling with the worry that withdrawal
of the Fed's stimulus could destabilise asset prices worldwide.
Despite the soft job data, most U.S. primary dealers expect
the Fed to announce at its next policy meeting Sept. 17 and 18
that it will cut the size of its bond purchases, according to a
Reuters poll on Friday.
"Although the U.S. job data was disappointing on the whole,
the jobless rate fell, inching closer to the 7.0 percent level,
which the Fed said is a threshold to end the quantitative
easing," said Tohru Yamamoto, chief fixed-income strategist at
"The Fed will start tapering in September, perhaps little by
little, like by $10 billion. It is hard to expect bond yields to
fall before the next Fed meeting," he added.
The 10-year U.S. Treasury yields stood at 2.949 percent
, off a two-year high just above 3 percent hit on
Friday, though they had gave up much of the gains made after the
The dollar index stood at 82.25 , steadying
from Friday's 0.6 percent fall. The euro fetched $1.3175,
off Friday's seven-week low of $1.31045.
Against the yen, the dollar briefly rose to as high as
100.11 yen thanks largely its strong correlation to Japanese
shares, but quickly gave up gains on profit-taking to stand at
99.55 yen for a gain of 0.4 percent from late last week.
Elsewhere, U.S. crude oil futures slipped slightly but
stayed near two-year highs supported by concerns a possible
military strike against Syria could stir broader conflict in the
Middle East and disrupt oil supplies.