* Nikkei records best November performance since 2005
* Yen hits 5-year trough vs euro, 6-month low vs dollar
* Asian shares edge up after hitting 1-wk closing high on
By Dominic Lau
TOKYO, Nov 29 Japanese stocks faltered slightly
on Friday after hitting their highest closing level in nearly
six years in the previous session, but still revelled in the
sliding yen to record their best November performance since
Investors nibbled at other regional equities, however, with
the MSCI Asia-Pacific outside Japan index edging
up 0.2 percent after reaching its highest close in a week on
Financial bookmakers expected UK, Germany and French stocks
to open steady, though Spanish assets were likely to be in focus
after rating agency Standard & Poor's raised its outlook on
Spain to stable from negative and affirmed its BBB-minus rating.
Japan's benchmark Nikkei dropped 0.4 percent, though
it was still up 9.3 percent this month as the yen slumped
against the euro and dollar.
Investors have been using the yen as a funding currency for
carry trades with the Bank of Japan committed to keeping
ultra-loose monetary policy to shore up growth -- in contrast to
the U.S. Federal Reserve which is moving towards unwinding its
$85 billion-a-month bond-buying campaign.
The Japanese currency hit a five-year low versus the euro at
139.705 yen, and a six-month trough of 102.61 yen to
The yen is down 4.3 percent versus the euro this month,
heading for its weakest monthly performance since March, while
it is off 4 percent against the greenback -- and set for its
biggest one-month fall since January.
Data on Friday showed Japanese consumer inflation
accelerated to a five-year high and factory output rose for a
second straight month in October, more evidence the recovery in
the world's third-largest economy should extend into 2014.
"Industrial production was good but it was below consensus.
Gradually, the market is coming to believe the BOJ will be
forced to react again sometime next year," said Kyoya Okazawa,
head of global equities and commodity derivatives at BNP Paribas
"A short-term correction might be possible because of funds'
year-end book-closing ... fundamentally, there is no reason to
short the market, only profit-taking," he added.
Powered by Tokyo's aggressive fiscal and monetary stimulus,
the Nikkei has rallied nearly 51 percent this year. If the gains
were to hold for the rest of this year, it would be the best
yearly rise since 1972.
By contrast, the MSCI Asia-Pacific ex-Japan index is up a
meagre 1.6 percent so far this year.
The Asian gauge has also sharply underperformed a 26.7
percent jump in the U.S. Standard & Poor's 500 and a 16.3
percent rise in the STOXX Europe 600 index.
Trading across most markets was light, as U.S. financial
markets closed for Thursday's Thanksgiving holiday and will have
half-day session on Friday.
Ahead of the euro zone inflation data later in the day, the
euro scaled a one-month high of $1.3622.
Preliminary German consumer prices harmonised with other
European Union countries accelerated in November, suggesting
euro zone inflation could come in higher than expected --
reducing pressure on the ECB to take further action to avoid
The Australian dollar stood at $0.9097 after
earlier skidding to a near three-month low of $0.9055.
Analysts at BNP Paribas recommended investors short the euro
against the Norwegian crown, sterling and the Australian dollar.
"In addition to the ECB next week, the RBA, Norges Bank and
BOE have meetings next week. We think the dovish policy of the
ECB will stand in contrast to these other central banks next
week, helping push the euro crosses lower," they said in a note.
Among commodities, gold inched down 0.1 percent to
just below $1,242 an ounce, having risen 0.5 percent overnight
on signs of physical demand from Chinese buyers.
Brent crude stabilised at about $110.8 a barrel
after shedding 0.4 percent in the previous session.