* Dollar rises anew on yen, boosts Japanese shares
* Strong trade numbers burnish outlook for U.S., global
* ECB under pressure to do more as inflation hits record low
By Wayne Cole
SYDNEY, Jan 8 Asian shares got a hand up on
Wednesday after strong trade data boosted expectations for U.S.
growth while a lessening of sovereign strains in Europe lifted
stocks there to the highest since 2008.
Japan's Nikkei again stood out with a rise of 1.9
percent, but some other regional markets remain out of favour as
funds flock to assets in the western world.
The dollar climbed against the yen after the U.S. trade
deficit shrank to its lowest in four years, thanks mainly to a
renaissance in energy production, prompting analysts to revise
up forecasts for economic growth.
Barclays, for one, doubled its estimate for last quarter and
now predicts annualised growth of 3 percent.
"Investors were relieved to confirm that the U.S. economic
recovery is intact," said Nobuhiko Kuramochi, a strategist at
Mizuho Securities, adding that eyes are now on Friday's jobs
The latest figures offered investors reassurance that the
Federal Reserve's decision to taper its asset buying was
justified by fundamentals. Minutes of the Fed's December meeting
are due later on Wednesday and markets will be hoping for a
clear commitment to keeping rates low for a long time to come.
Underlining the brighter mood were reports that the
International Monetary Fund will raise its forecast for global
growth in about three weeks, breaking a depressingly-long run of
All of which helped MSCI's all-country world stock index
hit its highest since mid-2008. Both the Dow
and the S&P 500 rose 0.6 percent.
That was enough to give most Asian markets a break from
recent selling pressure. MSCI's broadest index of Asia-Pacific
shares outside Japan added 0.5 percent.
Stocks in Singapore, India and Taiwan all made ground.
The region again lagged European indexes, which hit 5-1/2
year highs on Tuesday led by a near 3 percent jump in Spain.
Sovereign risks across the euro zone's periphery have been
receding as longer-term borrowing costs fall to multi-year lows.
Financial bookmakers expected UK, German and French equities
to open steady on Wednesday.
Yields on Irish 10-year debt dropped to their lowest in
eight years after the country's first debt sale since exiting
its EU/IMF bailout drew hot demand.
Yet data out Tuesday also showed core inflation in the EU
slowed to a record low of just 0.7 percent in December, fanning
fears of deflation ahead of the European Central Bank's policy
meeting on Thursday.
It was worries about inflation falling too far that led the
central bank to cut interest rates in November.
"This month's data will help reinforce expectations that the
ECB are ready and willing to take whatever steps they deem
necessary to prevent the economy from slipping into deflation,"
said economists at ANZ in a note to clients.
"While we think that the ECB will remain on hold this week,
we are expecting a very dovish statement from ECB President
The uncertainty kept the euro pinned at $1.3633 and
not far from its recent one-month low at $1.3570.
The dollar got a boost from the U.S. trade numbers and
climbed as far as 80.941 against a basket of currencies,
highs last seen in early December. It rallied to 105.01 yen
and away from two-week lows of 103.91 set on Monday.
In contrast, investors dumped the Canadian dollar after the
country reported a much larger trade deficit than expected, in a
blow to the economic outlook there. The dollar was up at
C$1.0796 on Wednesday, the highest since mid-2010.
The improving news on global growth was generally positive
for industrial commodities and oil.
Brent crude edged up 8 cents to $107.43 per barrel,
having broken five straight sessions of losses on Tuesday. U.S.
crude firmed 31 cents to $93.99.
Gold slipped as a firmer dollar and the rebound in U.S.
stocks prompted investors to take profits. Spot gold was
at $1,226.45 an ounce, off from a top on Tuesday of $1,245.25.