* MSCI Asia ex-Japan jumps 1 pct, Australia outperforms
* China shares rebound from sell-off
* Dollar/yen slips on sell-the-fact as BOJ candidates face
* RBA keeps rates unchanged as expected, Aussie hits day's
* European shares likely climb
By Chikako Mogi
TOKYO, March 5 Asian shares rebounded sharply on
Tuesday, reclaiming most of the previous day's steep losses
triggered by slumping Chinese stocks, as a globally
accommodative monetary stance helped revive risk appetite.
European markets are also seen climbing, with financial
spreadbetters predicting London's FTSE 100, Paris's
CAC-40 and Frankfurt's DAX would open up as
much as 0.6 percent. A nearly flat showing in U.S. stock futures
pointed to a subdued Wall Street start.
The MSCI's broadest index of Asia-Pacific shares outside
Japan jumped 1 percent after tumbling 1.3
percent when Chinese shares dived on concerns Beijing's move to
tighten the housing market could weigh on growth on Monday.
China shares rebounded from a two-month closing low, lifting
Hong Kong markets up 0.1 percent, as worries about policy
tightening ebbed after the central bank refrained from draining
funds following a sharp dip in rates in the money market.
Shanghai shares rose 0.9 percent.
The latest data confirmed a modest rebound in the world's
second-biggest economy this year, with the private February HSBC
Services Purchasing Managers' Index (PMI) falling to 52.1 from
January's 54.0, after seasonal adjustments.
Beijing pledged to boost fiscal spending in a bid to deliver
economic growth of 7.5 percent this year, with outgoing Premier
Wen Jiabao setting out a reform plan as China's annual
parliament meetings got under way on Tuesday.
"The Chinese economy will decelerate from the second
quarter, but the slowdown is not significant enough to derail
the economic recovery," said Dariusz Kowalczyk, senior economist
and strategist for non-Japan Asia at Credit Agricole CIB in Hong
Kong, adding that Monday's sell-off in Chinese shares was
"justifiable" because markets tend to move ahead of growth
"As property curbs are expanded, real estate construction
may well slow to the point of adding additional downward
pressure on the economy. However, the 7.5 percent growth target
announced today is safe," he said.
Australian stocks outperformed their Asian peers
with a 1.3 percent rally, with financials and consumer staple
shares leading gains after healthy retail figures and export
data supported an upbeat outlook for the economy.
The Reserve Bank of Australia kept its cash rate at a record
low 3.0 percent as expected, boosting the Australian dollar
to its day high of $1.0254.
The RBA kicked off a series of monetary policy meetings
taking place this week. Major central banks around the world are
expected to maintain a dovish stance, given fragile economic
conditions, political uncertainties in Europe, and U.S. budget
wrangling. Analysts also say none of the uncertainties is seen
as a risk serious enough to trigger a financial crisis.
Janet Yellen, the Federal Reserve's vice chair, said on
Monday the U.S. central bank's aggressive monetary stimulus is
warranted given how far the economy was operating below its full
"Despite spending cuts in the U.S., a lack of any kind of
political resolution in Italy and weaker data in Asia, we just
can't get a proper 'risk-off' mood going ... as mad money
(quantitative easing and zero interest rate policy) trumps every
other concern," said Kit Juckes, strategist at Societe Generale
in a note to clients.
Japan's Nikkei stock average closed up 0.3 percent,
after earlier scaling a fresh 53-month high.
The dollar slipped 0.5 percent against the yen to
92.96 yen on what traders see as "sell-the-fact" behaviour after
candidates for two Bank of Japan deputy governor posts faced
parliamentary confirmation hearings.
Expectations that the new BOJ regime, to start later this
month, will take much bolder reflationary measures pushed the
benchmark 10-year Japanese government bond yield
down as low as 0.585 pecent earlier, its lowest since June 2003.
Aside from the Chinese government's action to cool the
overheated property market, there is concern about U.S. growth
slowing after the automatic "sequestration" spending cuts were
allowed to kick in starting March 1.
Ongoing political turmoil in Italy also remains a potential
risk as last month's inconclusive election could pave the way
for another vote within months. But expectations the European
Central Bank would use its scheme to help fund struggling euro
zone nations underpinned investor confidence.
The euro held steady around $1.3040.
The ECB holds its policy meeting on Thursday, and while few
expect the central bank to cut interest rates this week, many
see such an action to come sooner than later.
Later in the week the BOJ and the Bank of England hold their
Spot gold added 0.5 percent to $1,581.30 an ounce,
snapping a four-day losing streak.
U.S. crude was up 0.3 percent at $90.38 a barrel
while Brent rose 0.4 percent to $110.53.
"I would call this move in the oil markets as bargain
hunting rather than any change in the outlook," said Ker Chung
Yang, senior investment analyst at Phillip Futures in Singapore.