* Fed's Yellen sounds in no hurry to taper, lifting Wall St
* Japan shares aiming for best weekly gain since May
* Dollar pushes above 100 yen, euro eases back
By Wayne Cole
SYDNEY, Nov 15 Asian share markets should find
reassurance in the prospect of extended U.S. monetary stimulus
on Friday, while a falling yen had Japanese shares on track for
their best week since May.
Early activity was light with MSCI's broadest index of
Asia-Pacific shares outside Japan barely
changed, though futures pointed to a firmer start for the Nikkei
following a bullish break higher on Thursday.
Australian stocks were steady amid a new twist in a
takeover battle for a local dairy company.
Wall Street reached record highs on Thursday after the
presumptive head of the Federal Reserve, Janet Yellen, robustly
defended the central bank's bold steps to spur economic growth,
calling efforts to boost hiring an "imperative" at a hearing
into her nomination.
The Dow ended 0.35 percent higher, while the S&P 500
gained 0.48 percent. The Nasdaq was restrained by
Cisco Systems Inc after disappointing results knocked
10 percent off its share value.
"Yellen still believes the benefits of QE outweigh the
costs-- a little tidbit that could have been the most important
thing she said market-wise," said William O'Donnell, chief U.S.
government bond strategist at RBS Securities in Stamford,
"She did not strike me, or our economics squad, as somebody
ready to roll back on QE3 and that even another 200,000-plus
print in the next nonfarm payroll number may not sway her."
One result is that the Fed finally seems to be convincing
markets that even if it does taper, an actual increase in the
official funds rate will still be distant. Short-term debt
markets rallied hard as investors pushed the timing of the first
hike far into the future.
Indeed, there has been a radical reappraisal on the outlook
for tightening since the Fed skipped a chance to start tapering
in September. Back then futures on the Fed funds rate
had implied a first hike in late 2014. Now a move to 0.5 percent
is not fully priced in until November 2015.
In just the past couple of days Eurodollar futures
have rallied so sharply that they now predict the cost of
borrowing dollars will stay near zero out to 2016.
That in turn has helped drag down Treasury yields, with
rates on two-year notes at just 29 basis points compared to a
peak of 54 in early September.
YEN GIVES GROUND
For once the decline in yields did not trouble the U.S.
dollar too much, in part because rates in Europe were falling
even more following another disappointing economic report.
Data showed the euro zone only just emerged from recession
in the third quarter with growth of a miserly 0.1 percent as
The euro was off at $1.3456 after getting as high as
$1.3497 on Thursday.
Neither were there any signs the Bank of Japan would be
diverted from its massive stimulus efforts with data showing the
economy slowed markedly last quarter as consumers and businesses
proved reluctant to spend.
The dollar has been making steady gains on the yen for three
weeks now to finally breach the 100.00 barrier. Early Friday, it
was enjoying the view at 100.06 yen, having bounced from
a low of 99.11 on Thursday.
In commodity markets, Brent crude oil rose a second straight
day on Thursday on worries about crude supply disruptions in
Libya, while gold drew some comfort from the prospect of
continued U.S. stimulus.
Brent for December delivery rose $1.39 to settle at
$108.51 a barrel on Thursday. U.S. crude was up 23 cents
at $93.99 a barrel.
Spot gold edged up to $1,286.79 an ounce and away
from the week's trough of $1,260.89.