* Funds return to emerging markets, drag on U.S. dollar
* Nikkei weathers firmer yen, disappointing Japanese figures
* China loan expansion seen as positive, U.S. markets shut
By Wayne Cole
SYDNEY, Feb 17 Asian shares built on their
recent rally on Monday as worries about emerging markets
continued to ebb, sucking the safe-haven support out of the U.S.
dollar while giving commodities a lift.
Stocks across the region felt the benefit with MSCI's index
of Asia-Pacific shares outside Japan up 0.7
percent, bringing its gains to almost 6 percent in eight
sessions. Indonesia's market added 0.8 percent, as did
Several once-embattled Asian currencies all gained ground as
sentiment improved and dealers reported an influx of funds to
many emerging markets. The Indonesian rupiah did especially well
with the dollar down 4 percent in as many days.
The lower dollar in turn tends to be positive for
commodities priced in that currency, helping spur gold to a
fresh three-month peak at $1,329.55.
Even Japan's Nikkei managed to shrug off a firmer
yen and soft domestic data to gain 0.5 percent. It had eased
earlier as the U.S. dollar lost a quarter of a yen to 101.58
, while the euro made a three-week peak at $1.3723.
The calmer mood was only briefly ruffled by data showing
Japan's economy grew just 0.3 percent in the fourth quarter of
last year, compared with the previous quarter, confounding
forecasts of a 0.7 percent gain.
The disappointing result will keep pressure on the Bank of
Japan to support the economy once an increase in the sales tax
goes through in April. The central bank's latest policy meeting
ends on Tuesday and the market will be keen to see what it makes
of the growth figures.
"We still have to see how much last-minute domestic demand
ahead of the sales tax hike boosts January-March GDP before
pondering whether extra fiscal and monetary stimuli are needed,"
said Junko Nishioka, chief economist at RBS Securities in Tokyo.
In energy markets, Brent oil futures dipped 13 cents
on Monday to $108.95 a barrel, while U.S. crude firmed 30
cents to $100.60.
There was better news on China as data showed banks there
disbursed the highest volume of loans in any month in four years
in January, a surge that suggests the world's second-biggest
economy may not be cooling as much as some fear.
Chinese banks made 1.32 trillion yuan ($218 billion) worth
of new yuan loans in January, beating a 1.1 trillion yuan
forecast and nearly three times December's level.
It is usual for loans to spike in January, when banks try to
lend as much as they can to grab market share, but last month's
surge was still the largest since January 2010.
The next hurdle will be Thursday's HSBC flash PMI survey of
manufacturers for February, given that January's disappointing
result sent ripples through global markets.
The same day has a rash of flash PMIs for Europe and the
United States, along with U.S. inflation data.
Finance ministers and central bankers from the Group of 20
also start their meeting in Sydney on Thursday. Events run
through to Sunday, when European Central Bank President Mario
Draghi, among others, gives a news conference.
Minutes of the February policy meeting of the Federal
Reserve are due on Wednesday but are not expected to differ
greatly from the steady outlook offered by Fed chief Janet
Yellen last week.
Yellen still has to appear before the Senate after her
testimony was postponed due to bad weather, but no firm day has
been set as yet.