* Wall St rallies with Ukraine tensions curbed, lifts Asia
* Spreadbetters see higher open for European shares
* Dollar/yen steady after sharp fall in U.S. yields halted
By Shinichi Saoshiro
TOKYO, Aug 11 Asian stocks rose on Monday as
tensions eased slightly in Ukraine, while the dollar held steady
against the safe-haven yen after rebounding sharply late last
Spreadbetters expected the upbeat momentum for equities to
continue into Europe, with Britain's FTSE seen opening
as much as 0.6 percent higher, Germany's DAX up 1
percent and France's CAC 0.8 percent higher.
U.S. stock futures also pointed to a modestly firmer
opening later in the day.
Wall Street surged on Friday after Russia said it had
finished military exercises in southern Russia, which the United
States had criticised as a provocative step amid the Ukraine
MSCI's broadest index of Asia-Pacific shares outside Japan
was up 1 percent, more than making up for
Friday's 0.9 percent drop when geopolitical woes buffeted risk
Tokyo's Nikkei rose 2.2 percent, and also was helped
as the yen's sharp rally against the dollar on Friday was
reversed. The index had lost 3 percent on Friday.
But investors remained wary with tensions persisting in
other global hotspots such as Iraq, marked by an increasing
death toll and new U.S. air strikes.
"We are seeing investor sentiment caught between positive
U.S. economic fundamentals and psychological negatives, like
geopolitical risk. Investor sentiment is easily swayed in such a
situation, which could lead to higher volatility and market
turbulence," said Koji Fukaya, president at FPG Securities in
The dollar, which suffered heavy losses against the yen last
week after U.S. President Barack Obama authorised air strikes in
Iraq, was steady after rebounding sharply late Friday as the
Ukrainian news arrested the slide in U.S. Treasury bond yields.
Some observers saw the correlation between lower Treasury
yields and weaker dollar loosening amid the latest phase in
Kathy Lien, managing director at BK Asset Management, said
heightened geopolitical uncertainty makes Treasuries more
attractive to investors and central banks looking to park their
money in such safe havens, with their demand supporting the
"Geopolitical uncertainty is clearly driving risk appetite
and the conflicts abroad have made U.S. assets very attractive,"
she wrote in a note to clients.
The dollar was up 0.1 percent at 102.14 yen after
touching a low of 101.51 on Friday.
The euro stood little changed at $1.3401.
The benchmark U.S. Treasury 10-year note yielded
2.436 percent, having pulled back from a 14-month low of 2.349
percent struck Friday.
In commodities, London copper edged up as appetite for risk
grew following the move by Russia, while optimism over the
outlook for China's economy underpinned demand.
Three-month copper on the London Metal Exchange
climbed 0.5 percent to $7,030.00 a tonne.
Gold was off to a muted start to the week as equity markets
firmed, but the safe-haven metal held above $1,300 an ounce
threshold as the geopolitical situation in the Middle East
Spot gold was flat at $1,307.20 an ounce after
hitting a three-week high of $1,322.60 on Friday.
Brent crude hovered above $105 a barrel on Monday, dropping
from a one-week high hit on Friday, as U.S. intervention in Iraq
eased concerns over the risk of disruption to supply from OPEC's
(Editing by Eric Meijer & Kim Coghill)