* Asian shares subdued after flat finish on Wall St
* Japan holiday, dearth of data leaves market waiting on Fed
* Yellen testimony to start at 1500 GMT, no fireworks
By Wayne Cole
SYDNEY, Feb 11 Asian markets settled in for a
session of consolidation on Tuesday as investors waited to hear
the new head of the U.S. Federal Reserve's outlook for the
economy and policy, with most expecting a reaffirmation of the
Fed Chair Janet Yellen gives her first testimony before the
House Financial Services Committee at 1500 GMT, and will likely
face questions on the state of the labour market and the future
pace of tapering.
In the meantime, market moves were marginal with the dollar
and stocks a shade softer, and activity extra light due to a
holiday in Japan. MSCI's broadest index of Asia-Pacific shares
outside Japan was just a fraction lower, as was
Australia's main index.
On Wall Street, the Dow eked out a 0.05 percent gain,
while the S&P 500 added 0.16 percent. Share values have
been supported by solid earnings. With about 69 percent of the
S&P 500 having reported, 68 percent have topped profit
expectations, above the long-term average.
MSCI's all-country equity index rose 0.26
percent on Monday, while the pan-European FTSEurofirst 300
closed up 0.08 percent.
Currencies were confined to well-worn ranges, though the
dollar was softer overall. The dollar index, which
measures the greenback against six major currencies, last traded
down 0.06 percent at 80.643.
The dollar also faded back to 102.24 yen from a top
at 102.65, while the euro inched up to $1.3645.
Yellen appears before the Republican-controlled House of
Representatives Financial Services Committee on Tuesday and the
Democrat-controlled Senate Banking Committee on Thursday.
Analysts generally assume Yellen will stick with the script
and reiterate that the Fed will continue to scale back its asset
buying, as long as the economy improves as expected.
"The testimony is likely to be more theatre than economics,"
said Marshall Gittler, head of global FX strategy at online
trader IronFx Global.
"Yellen will probably try to remain polite and give upbeat,
optimistic answers that will play well on TV. In that respect
her testimony may present a favourable picture of the U.S.
economy that could boost the dollar."
One argument for staying the course on tapering is that bond
investors have learned to live with the idea without freaking
out, as they did a couple of times last year.
Yields on U.S. 10-year Treasury paper have
settled back at 2.67 percent, well below recent highs of 3.04
percent, and lessened a threat to the housing market.
Investors, too, have accepted that tapering is not the same
as tightening and have pushed out the timing of the first actual
hike in the Fed funds rate. A move is not fully priced in until
late 2015 , a view Yellen is likely to endorse.
The prospect of low rates for longer has been supportive of
gold, which edged up to $1,273.74 and threatened the
January high at $1,278.01.
In oil markets, Brent crude was pressured by sinking heating
oil prices as the market looked toward the end of a long and
frigid winter, and as supplies increased from Libya and the
North Sea. Brent fell back $1.15 to $108.42 a barrel and
off a five-week high above $109.
U.S. crude fared better and held steady at $100.06,
after rising to its highest this year at $100.55.