* Upbeat China PMI adds to share gains, lifts Aussie
* Minutes suggest Fed will keep easy policy for foreseeable
* Spreadbetters see higher open for European shares
By Shinichi Saoshiro
TOKYO, May 22 Japanese stocks led a surge in
Asian equities to a one-year high on Thursday, after an upbeat
reading on China's factory sector burnished risk appetite and
blunted some of the more pessimistic views on the world's
Spreadbetters expect the momentum to carry over to Europe,
with Britain's FTSE seen opening up as much as 0.2
percent, Germany's DAX 0.3 percent and France's CAC
0.2 percent higher.
Equities were already on the front foot after minutes of the
U.S. Federal Reserve's last meeting reassured investors that
policy makers will continue to support the economy, depressing
the safe-haven yen.
That set up the riskier asset markets for a decent uptick
when a private survey showed China's factory sector turned in
its best performance in five months in May.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose as much as 1.1 percent to 488.20, its best
level since May last year. It was last up 1 percent.
The Shanghai Composite Index climbed 0.5 percent.
"The data is better than the market had expected," said
Zhang Qi, a Shanghai-based analyst with Haitong Securities. "But
whether the upward trend can continue depends on whether capital
would constantly go to some blue chips."
News suggesting a government-controlled insurer is poised to
ramp up investment in domestic equities was the icing on the
cake for bullish Japan shares, with the Nikkei surging
The Australian dollar, which is sensitive to developments in
the economy of its major trading partner China, rose 0.1 percent
to $0.9260, pulling away from Wednesday's three-week
low of $0.9208.
The price of copper, considered a barometer of global
economic health, also edged up on China relief. London copper
edged up from a nine-day low hit the session before, also
underpinned by signals U.S. rate hikes were not likely in the
near-term. Three-month copper on the London Metal Exchange
edged up 0.5 percent to $6,868 a tonne.
Medium and long-dated U.S. Treasury yields had climbed
overnight, reflecting discussions by the Fed for the eventual
tightening of policy though the start of that cycle was seen as
being some way off.
The closely-watched minutes of the Fed's April Open Market
Committee meeting released on Wednesday showed that policy
makers had begun to lay the groundwork for an eventual exit from
their easy stance, but that the discussions were "prudent
planning" and not a sign rate hikes would come any time soon.
"There was a lot of rejoicing at the Fed minutes; a one line
synopsis of the release would read - the Fed continues to
champion accommodation for the foreseeable future," Evan Lucas,
market strategist at IG in Melbourne, said in a note to clients.
The uptick in risk appetite weighed on the yen and
underpinned the dollar somewhat.
The greenback rose 0.4 percent to 101.73 yen,
extending its rebound from a 3-1/2 month low of 100.805 yen
touched on Wednesday when Bank of Japan Governor Haruhiko Kuroda
reiterated his optimistic view on the Japanese economy and
provided no hints of further monetary easing in the near term.
The dollar also advanced against the euro, which has been
hurt by growing expectations the European Central Bank will
ease monetary policy in June and potentially destabilising
European Parliament elections later this week.
The euro stood at $1.3675 after hitting a three-month
trough of $1.3634 on Wednesday. Traders are now looking at the
euro zone purchasing managers surveys due later in the day for
some immediate catalysts.
Brent crude steadied near a 2-1/2 month high above
$110 a barrel, supported by a large draw in U.S. crude stocks
and as the China factory survey suggested better demand from the
world's No.2 oil consumer.
(Additional reporting by Grace Li in Hong Kong; Editing by Shri