* MSCI Asia ex-Japan falls as Korea hurt by falling Apple
* Nikkei ends at 32-month highs after yen hits highs the day
* Japan warns of excessive yen weakness, easing yen selling
* Platinum hits three-month high, eyes parity with gold
* European shares likely inch lower
By Chikako Mogi
TOKYO, Jan 15 Japanese shares surged to 32-month
highs on Tuesday on the back of the yen's slide the previous day
as expectations grew that strong political pressure will prompt
the Bank of Japan to deliver bold monetary easing measures.
Other Asian stock markets struggled, with the MSCI's
broadest index of Asia-Pacific shares outside Japan
falling 0.4 percent, led by a 1.5 percent
decline in its technology sector
The pan-Asian index was dragged down by a 1.2 percent tumble
in South Korean shares, hit by losses in Apple Inc's
suppliers after media reports said the iPhone maker had
slashed orders of screens and other components on
weaker-than-expected demand. Apple suppliers in Taiwan also
pulled Taipei stocks down 0.8 percent, their first loss
in five sessions.
European markets are likely to trade cautiously, with
financial spread-betters predicting London's FTSE 100,
Paris's CAC-40 and Frankfurt's DAX would open
down as much as 0.2 percent. A 0.2 percent fall in U.S. stock
futures hinted at a soft opening on Wall Street.
"Investors (in the Seoul market) are taking profits on the
technology sector, which rallied for the past couple of months,
while snapping up auto shares which have been lacklustre," said
Kim Soo-young, an analyst at KB Investment & Securities in
Tokyo shares were the highlight of the session, with the
benchmark Nikkei stock average climbing as much as 1.4
percent to its highest level since late April 2010 as the yen
remained on a weakening track, helping to improve earnings
prospects for exporters. The Nikkei ended up 0.7 percent.
Japanese stocks got a boost "because the yen weakened further
against dollar over the weekend," said Naoki Fujiwara, a fund
manager at Shinkin Asset Management in Tokyo. "We expect the
current trend to continue until the Nikkei reaches 11,000 and
the yen hits 90. Once it gets there, Tokyo stocks are likely to
move in a boxed range."
Yen-selling activity eased on Tuesday, however, when
Japanese Economics Minister Akira Amari said excessive yen
weakness could have a negative impact on people's livelihoods
through a rise in import prices.
The dollar took a breather, pulling back as much as 1
percent to 88.62 yen, having hit its peak since June 2010
of 89.67 yen on Monday. The euro shed nearly 1 percent to 118.58
yen, having hit its highest since May 2011 of 120.13
The yen's recent weakness also lifted gold priced in yen,
with Tokyo's benchmark gold futures contract hitting a
record high for a second straight session.
Many still believe the weak yen trend has more momentum,
supported by benchmark U.S. Treasury yields
inching higher since late last year.
In a research report, Societe Generale noted that U.S.
exports in 2012 have overwhelmed others in the Group of Five --
the United States, Britain, Germany, France and Japan, and
concluded the U.S. was "winning the currency war" while Japan
was losing "in a really big way".
"Buying USD/JPY is the obvious conclusion," it said.
HOPES AND RISKS
Among other markets, Indian shares extended gains
to a two-year high on hopes the central bank will cut interest
rates later this month.
Hong Kong shares fell 0.3 percent after hitting a
19-month high earlier in the day. But the Shanghai Composite
added 0.7 percent to a six-month high, led by financial
shares, as investor sentiment was buoyed by last week's data
showing stronger-than-expected trade growth and healthy credit
"Money that was sitting on the sidelines has now been
persuaded that the rally is sustainable," said Zhang Weiguang,
equity analyst at Shanghai Securities.
Stabilising U.S. and Chinese economic conditions as well as
supply concerns in South Africa have underpinned platinum
prices, putting them on the brink of reaching parity with gold.
Spot platinum hit a three-month high of $1,660.75 an
ounce on Tuesday for a sixth day of gains, while spot gold
inched up 0.2 percent to $1,670.33.
As the world's No. 2 economy and top consumer of most
commodities, China holds the key to sentiment. Ian Bremmer,
president of political risk firm Eurasia Group, cautioned that
political instability in emerging markets, led by China, will be
one of the biggest risks for markets in 2013.
U.S. fiscal problems are among some of the other factors
investors will need to consider.
Federal Reserve Chairman Ben Bernanke on Monday urged U.S.
lawmakers to lift the country's borrowing limit to avoid a
potentially disastrous debt default.
Also on Monday, U.S. President Barack Obama refused to trade
cuts in government spending in exchange for raising the
borrowing limit. If the limit is not raised, the United States
could default on its debt.
U.S. crude fell 0.4 percent to $93.74 a barrel and
Brent eased 0.3 percent to $111.51.
A weak equities market weighed on Asian credit markets,
widening the spread on the iTraxx Asia ex-Japan investment-grade
index by 2 basis points.