* MSCI Asia ex-Japan rises; Nikkei opens higher
* Australian dollar up as investors await RBA minutes
* U.S. dollar index steady, off last week's lows
By Lisa Twaronite
TOKYO, July 16 Asian shares edged higher on
Tuesday, taking their cue from U.S. shares after
weaker-than-forecast retail sales growth backed the view that
the U.S. Federal Reserve will hold off reducing its bond-buying
stimulus anytime soon.
MSCI's broadest index of Asia-Pacific shares outside Japan
added about 0.1 percent to 440.75.
Citigroup's strong earnings helped the S&P 500 end higher on
Monday for an eighth straight day, the longest such streak since
The Nikkei share average rose 0.8 percent, catching
up after Japanese financial markets were closed for a public
holiday on Monday.
"As U.S. stocks edged up to new all-time highs, the yen got
softer again, and as there are no major domestic events
scheduled this week, it's only reasonable to predict that the
Nikkei will test a new (7-1/2-week) high," said Kenichi Hirano,
a strategist at Tachibana Securities.
U.S. retail sales increased 0.4 percent last month, half of
the rise economists polled by Reuters had forecast, according to
U.S. government released on Monday. The slowdown prompted
economists to downgrade their second-quarter growth forecasts to
an anaemic 1 percent increase.
While the Fed is focusing on labour market improvements to
determine when to begin tapering its $85 billion in monthly
purchases, weakness in the consumer sector could indicate
broader economic problems. Investors await Fed Chairman
Bernanke's twice-yearly monetary policy report to the Congress
on Wednesday and Thursday for more clues on the central bank's
A separate report on Monday showed that growth in New York
state's manufacturing sector accelerated in July.
Yields on U.S. benchmark 10-year Treasury notes
were last at 2.542 percent, steady from their U.S. close of
2.543 percent and well below a two-year high of 2.76 percent
touched on July 8.
The dollar index gained about 0.1 percent to 83.109
in early trade, moving away from last week's two-week low of
82.418 toward a three-year high of 84.753 set last Tuesday.
The dollar was little changed versus the yen at 99.91 yen
, well below last week's high of 101.21 yen on Wednesday.
The euro was edged down to $1.3059, moving away from
last week's three-week high of $1.3201, as concerns rose about
Spain's political and financial woes.
Spanish Prime Minister Mariano Rajoy said on Monday he ruled
out stepping down after opposition leaders called for him to
leave office over a ruling party financing scandal.
The political turmoil came against a backdrop of a deepening
credit crunch that threatens banks and the broader economy, the
International Monetary Fund warned in a report on Monday.
The Australian dollar added about 0.2 percent to $0.9107
, taking back lost ground after it fell below 90 U.S.
cents on Friday.
Investors awaited minutes from the Reserve Bank of
Australia's July meeting, at which the central bank kept its
cash rate at a record-matching low of 2.75 percent as expected
and reiterated that there could be room for further cuts as the
local currency was still high.
"We expect the RBA board minutes from the 2 July meeting,
released later today, to reiterate the RBA's easing bias and
preference for the AUD to fall further, strategists at Barclays
said in a note to clients.
The Barclays strategists added that they continue to prefer
taking short positions in the Australian dollar against its U.S.
counterpart, in light of Australia's dependence on raw material
shipments to China. China is Australia's single biggest export
Data on Monday showed that China's second-quarter economic
growth cooled to 7.5 percent from the year-earlier period from
7.7 percent in the previous quarter, in line with expectations.
Commodity markets continued to take the Chinese data in
stride, relieved it did not disappoint.
Copper added 0.1 percent to $6,924.75 a tonne, while
U.S. crude rose 0.2 percent to $106.56 a barrel.