* MSCI Asia ex-Japan index up 0.1 pct, Nikkei off 0.3 pct
* European shares expected to open softer
* Euro, yen strengthen against dollar
* Copper falls to 3-month lows, gold extends overnight drop
By Dominic Lau
TOKYO, Nov 19 Asian shares edged to a two-week
high on Tuesday, riding on the previous day's hefty gains
sparked by optimism over China's economic reform plans, while
the dollar was hobbled by expectations the U.S. Federal Reserve
will keep its stimulus a little longer.
MSCI's broadest index of Asia-Pacific shares outside Japan
ticked up 0.1 percent, adding to Monday's 1.4
percent rally fed by a sharp jump in Chinese stocks and heading
for a fourth straight day of gains.
"China's reform pledge was sexier than perceived, bringing
risk back into play in emerging markets including South Korea
which is still comparably low valued," said Kim Yong-goo, a
market analyst at Samsung Securities.
China's CSI300 Index surged 3.3 percent on Monday,
its biggest one-day rise in two months, to hit a four-week peak.
The index took a breather on Tuesday, slipping 0.7 percent.
Hong Kong-listed Chinese stocks advanced 0.6
In Tokyo, the Nikkei fell 0.3 percent, further
moving away from a six-month high hit on Friday, with a trader
saying domestic investors continued to cash in recent gains.
European shares were likely to follow the Japanese lead,
with financial bookmakers expecting Britain's FTSE 100,
Germany's DAX and France's CAC 40 to open down
as much as 0.4 percent, ahead of the German ZEW economic
The yen was up 0.1 percent at 99.885 yen to the dollar
, adding to a 0.2 percent rise overnight to end a two-day
run of losses.
The euro was steady at $1.35080, not too far from a
two-week high of $1.3542 reached on Monday. Against a basket of
major currencies, the dollar eased 0.1 percent to 80.723,
languishing near a more than one-week low of 80.565 reached on
As the dollar weakened on expectations that the Fed will
continue its bond-buying campaign under incoming chief Janet
Yellen, the 10-year U.S. Treasuries yield slipped to
below 2.70 percent.
Investors remained on guard for any clues as to when the
U.S. central bank will start unwinding its $85 billion-a-month
stimulus programme, although many in the markets now see any
move unlikely until March.
Selling in the dollar was checked, however, after optimistic
comments on the U.S. economy by Fed officials on Monday.
William Dudley, the president of the Federal Reserve Bank of
New York, said he was becoming "more hopeful" about the U.S.
Investors will turn more cautious early next year as they
try to front-run when the Fed will start unwinding its stimulus,
said Evan Lucas, market strategist at IG in Melbourne.
"The markets will start to front run the Fed like they did
in August leading into the September meeting," he wrote in a
note. "Come late January I suspect there will be a change of
sentiment from fund managers and hedge funds alike as they start
to predict the end and that will affect the current run."
When that happens, emerging assets would likely come under
pressure after being buoyed by cheap money from central banks
over the past few years.
The Indonesian rupiah was up 0.2 percent at 11,600
per dollar, still not far from a 4-1/2 year low of 11,670
touched last week, while India's rupee gained 0.3 percent
to a two-week high of 62.227 to the dollar, on track for a fifth
day of rises.
Overnight, U.S. stocks were mixed. The S&P 500 ended
lower while the Dow Jones industrial average eked out a
slight gain but failed to close above its milestone level of
16,000, as stocks sold off late in the session after cautious
comments by activist investor Carl Ichan on the equities market.
Among commodities, copper prices dropped 0.7 percent
to around $6,924 a tonne, hitting a three-month low. Gold
dipped 0.2 percent to about $1,271 an ounce, extending the
previous session's 1.2 percent slide.
U.S. crude prices came under further, down 0.3
percent to below $93 a barrel, having fallen 0.9 percent
overnight to near a 5-1/2 month low of $92.51 touched last