* MSCI World index has pre-EM selloff peak in sight
* European shares near highs, bumper results buoy BHP
* Yen the currency weakling on BoJ largesse
By Simon Jessop
LONDON, Feb 18 Sharp gains in Tokyo pulled
global stocks higher on Tuesday after the Bank of Japan pumped
more stimulus into the economy, hitting the yen, while caution
before German data kept European share markets just below recent
The largesse, in the form of an expanded loan programme to
Japan's commercial banks, was partially offset by action to rein
in lending in China and more hawkish comments on rate rises in
The subsequent 3.5 percent gain for Japan's Nikkei
contrasted with the rest of Asia but still
helped the MSCI World index edge back closer to
the high it hit prior to January's emerging market-led selloff.
The index is now just 0.4 percent off that peak, helped by a
0.2 percent gain on Tuesday that was buoyed in turn by
London-listed mining heavyweight BHP Billiton ,
which rose after forecast-beating results.
"I think on a valuation basis stocks still aren't
expensive," said Matt Basi, head of sales trading at CMC
Markets. "It's natural after the run-up that we saw last year,
there's still money parked on the sidelines waiting to do a bit
of bargain hunting."
In Europe, with base metals weaker on demand concerns
, the BHP gain was not enough stop Basic Resources
weighing on the pan-regional FTSEurofirst 300,
which edged lower after rising for 8 out of the 9 last sessions.
Traders flagged some caution ahead of ZEW sentiment data in
Germany, due at 1000 GMT, although a positive reading could lend
fresh support to the region's equities after Germany and France
posted stronger than expected growth data.
"Any further improvement (in the ZEW) would back the idea
that the current recovery has legs, with business confidence
returning to all euro zone member states and not only to
Germany," Credit Agricole said in a note.
German Bund futures edged slightly higher to trade
up 17 ticks on the day.
U.S. stock futures pointed to a
marginally higher open later in the day, a return to work for
many after a three-day weekend.
YEN LOSES GROUND
The big loser from the BoJ action and subsequent bank-led
Nikkei rally was the yen, which lost ground against all of its
major currency peers and saw the dollar gain 0.7 percent to hit
a two-week high of 102.745 yen.
While partly a result of recent data-led dollar weakness, it
nevertheless helped the dollar edge higher against a basket of
currencies. The euro also rose against the yen,
hitting a 2-1/2 week high, but was flat against the dollar
A run of weak U.S. data - most recently manufacturing output
and the last two major payrolls numbers - has put the dollar
under pressure and led to fresh speculation about the likely
pace at which the U.S. will withdraw its economic stimulus.
That helped gold and silver weather some profit-taking to
hold near 3-1/2-month peaks hit on Monday, with gold trading at
$1,328.30 per ounce and silver at $21.64.
More insight on the U.S. Federal Reserve's current thinking
is likely on Wednesday, when it publishes the minutes of its