* Nikkei scales 6-year high on last Tokyo trading day of
* Yen hits fresh five-year lows on dollar and euro
* Other Asian markets more mixed as funds return to US,
By Wayne Cole
SYDNEY, Dec 30 Japanese shares ended a stellar
year with a flourish on Monday, rising to a six-year peak as the
yen skidded to fresh lows for a third straight session, again
leaving behind other Asian markets.
Tokyo's Nikkei advanced 0.7 percent on its last
trading day of the year. The market is closed from Tuesday to
Friday. Australian stocks rose 0.6 percent to bring
their gains for the year to 15 percent.
Much of Asia, however, continued to underperform, in part
due to investors shifting funds from emerging markets and into
Europe and the United States.
Japan's competitors have also been complaining about the
weak yen giving it a trade advantage. South Korea's deputy
finance minister warned the yen was falling too fast, and the
head of China's National Development and Reform Commission said
the impact on neighbours needed to be monitored.
That could have been one reason MSCI's broadest index of
Asia-Pacific shares outside Japan was only up
0.1 percent, and looked set to dip 0.2 percent for the year.
In stark contrast, Japan's Nikkei has risen 56.7 percent in
2013, its best annual performance since 1972, urged on by
aggressive monetary and fiscal stimulus.
There were more promising signs for the economy when the
Asahi newspaper reported Japan's most influential business lobby
has agreed to encourage its members to raise workers' base pay
for the first time in six years.
Many economists say an increase in base pay is essential to
Prime Minister Shinzo Abe's pledge to end 15 years of deflation
and to help the Bank of Japan meet its 2 percent inflation
Aiding the economy has been the fall in the yen this year,
which has left it at five-year trough against the dollar and
The dollar was up at 105.36 yen on Monday after
reaching a fresh peak at 105.415. The yen has posted ninth
consecutive weeks of falls against the dollar, the longest such
run since 1974.
The euro was also firm at 144.705 yen, having been
as far as 145.67 yen on Friday.
Thin year-end conditions made for some wild moves, with the
euro vaulting as high as $1.3892 on Friday before falling
back. On Monday, the single currency was somewhat calmer at
$1.3740 with offers crowded in the $1.3810/35 area.
The single currency could find further support from comments
by European Central Bank President Mario Draghi that he saw no
urgent need to cut interest rates again and no signs of
Financial bookmakers expected Britain's FTSE 100,
Germany's DAX and France's CAC 40 to open
steady to modestly softer.
Less positive was news that Italy's third-biggest bank,
Monte dei Paschi di Siena, was forced to delay a vital
3 billion euro ($4.1 billion) share sale because of shareholder
opposition, plunging its turnaround plan into uncertainty.
The world's oldest bank needs to tap investors for cash to
pay back state aid and avert nationalisation.
Underpinning both the dollar and euro have been widening
yield premiums over Japanese debt.
Yields on the U.S. benchmark 10-year Treasury note have
climbed to their highest in more than two years at 3.02 percent
. The comparable Japanese yield is just 0.735 percent
Analysts at RBS note that yields on the 30-year Treasury
bond were approaching a hugely important level at 4.05 percent,
which marks the top of a bull channel going back two decades. A
breach there would be viewed as very bearish for bonds.
In commodity markets, London copper was up at its
highest level in four months, with signs of economic revival in
Asia and the United States burnishing the demand outlook for
Gold edged down to $1,206 per ounce and was on track
for its biggest annual loss in three decades at nearly 30
Brent crude oil was 46 cents firmer at $112.64 a
barrel, while U.S. light sweet crude inched up 5 cents to
$100.37 a barrel.