* Dollar eyes 100 yen after G20 accepts Japan stimulus
* U.S. stocks seen firmer, corporate earnings in focus
* Italian political resolution lifts shares, bonds in Milan
* Gold jumps over 2 pct, rebounding from last week's tumble
By Richard Hubbard
LONDON, April 22 The Japanese yen weakened
toward 100 to the dollar on Monday and shares rose after the G20
accepted Japan's bold stimulus policies, helping to counter the
gloom over the global growth outlook.
U.S. stock index futures also pointed to a higher open on
Wall Street, where the focus is on quarterly corporate results
and whether these suggest further weakness ahead.
In its communique after a two-day meeting, the G20 avoided
any direct criticism of Japan's policies and appeared to accept
the need to reflate the world's third largest economy as part of
efforts to invigorate a shaky global economic recovery.
Major world central banks have been holding interest rates
at rock-bottom levels since 2008 while pumping over $6 trillion
into their banking systems through loans and asset-purchase
operations with only modest success so far.
"The real issue of deflation in Japan has to be tackled
before we can have a genuine global recovery," said James Bevan,
chief investment Officer at CCLA Investment Management.
The G20's actions removed any remaining obstacles to further
yen weakness, setting up a test of the symbolic 100 yen to the
dollar level and boosting demand for Japanese stocks.
"Japan not only escaped criticism, but on the contrary won
praise as a country that was fulfilling its global obligations,"
said Marshall Gittler, head of global FX strategy at IronFX.
"That is in effect the green light for the BOJ's easing,
which we expect will push USD/JPY through the magic 100 number
in the not-too-distant future - perhaps as early as today."
The dollar was at 99.75 yen, off an intraday high of
99.90 and just below a four-year peak of 99.95 hit on April 11.
The euro also rose against the yen, reaching 130.70
from around 129.98 late on Friday, near a three-year
peak of 131.10 set earlier this month.
Against the dollar, the euro eased slightly to $1.3040
after touching a session high of $1.3130 on Friday.
The euro, which failed to break above $1.32 recently, has been
stuck in a $1.30/32 range for the past week.
European stock markets were on course for a second straight
daily gain, helped up by a jump in Italy's blue-chip index after
the country's long-running political crisis moved a step closer
Milan's FTSE MIB index gained as much as 2 percent
on hopes the re-election of Italy's 87-year old president
Giorgio Napolitano would see a new government emerge within
days, ending two months of political stalemate.
The broad FTSEurofirst 300 index was up 0.8 percent
at 1,162 points at midday, while Paris's CAC-40 and
Frankfurt's DAX were about 0.75 percent higher.
MSCI's world equity index gained 0.25
percent, in part due to the better tone seen earlier in Asia
when Japan's Nikkei hit its highest level in five years
as the yen weakened after the G20 statement.
In the debt market Italian 10-year bond yields dropped to
near their lowest levels in two years at 4.08 percent
in response to the political resolution, while
safe-haven equivalent German bonds were steady at 1.24 percent.
Traders had not expected a big move in German bonds as the
market is awaiting key surveys on European purchasing managers'
activity in April, due on Tuesday. These are likely to show the
euro zone remains mired in recession, increasing the chance of a
rate cut by the European Central bank.
In the commodity markets gold rebounded from its sharp
sell-off last week, though sentiment remained shaky after the
precious metal posted its biggest-ever daily loss in dollar
terms last Monday.
The spot gold price rose more than 2 percent at one
point to a high of $1,436.70 an ounce, well above the two-year
low of $1,321.35 touched last week.
U.S. gold futures hit a high of 1,434.50 an ounce,
up 2.8 percent from the previous close of 1,395.60.
Oil also rebounded, extending its gains into a third day as
low prices brought buyers back into the market following sharp
drops earlier in the month due to the worries about the growth
outlook and its impact on demand.
Brent has lost 10 percent since the start of April as growth
in the United States and China - the world's two largest oil
consumers - slowed while recession in Europe deepened.
June Brent crude rose $1 a barrel to $100.65, while
U.S. crude for June delivery gained 65 cents to $88.65 a
barrel after a 3.6 percent loss last week.
"This is more bargain-hunting than anything else. People are
getting back in the market, but that may not be sustained
depending on the (economic) data this week," said Simon Wardell,
an analyst at Global Insight.