* Dollar holds gains, edges up to highest since Oct
* Euro weighed down by sovereign debt worries
* Japan stocks rise as dollar boosts exporters
* Silver, gold firmer on Wednesday, but off record highs
By Daniel Magnowski
SINGAPORE, Nov 10 (Reuters) - The U.S. dollar rose
marginally on Wednesday to hit its highest levels since late
October against a basket of major currencies as the euro
extended its losses over worries about euro zone sovereign
debt.
The dollar's strength boosted exporters in Japan, helping
to push the Nikkei average up to a four-month high, while gold
and silver inched up again after pulling back from record highs
reached on Tuesday.
The dollar gained as U.S. Treasury bond yields rose, with
the impact of the currency move felt across asset classes. The
dollar index <.DXY> rose as high as 77.869, a level it last
touched in late October.
"We've failed to notice that there is an improved tone to
U.S. data and that is manifesting itself in a bounce in the
U.S. dollar and it is manifesting itself in a bounce in U.S.
Treasury yields," said Robert Rennie, chief currency strategist
at Westpac Bank in Sydney. "That is a process that can go a bit
further. It's quite a potent force in the short term," he said.
Wall Street offered a bearish cue for Asia as stocks fell
for a second day with selling picking up into the close. The
MSCI index of Asian shares outside of Japan <.MIAPJ0000PUS>
fell 0.7 percent.
However, the dollar boosted Japan's Nikkei average <>
as exporters were among the chief beneficiaries of the
currency's rise. Canon Inc <7751.T> rose 2.3 percent and
Advantest <6857.T> climbed 2.6 percent
The Nikkei firmed 1.2 percent to 9,807.6 after trading
earlier as high as 9,842, its highest level since June.
Japanese banks also pushed the Nikkei higher on hopes they
would not be the main focus of global regulators because of
their domestic focus. Mizuho Financial Group <8411.T> soared
5.9 percent.
Japan's stock market has struggled to break decisively
through 9,800, but traders said a clear move beyond resistance
at 9,807 may signal the start of a more sustained rally.
"The July peak had formed resistance for the Nikkei, and if
it manages to end the day above the level, more gains will
clearly be in order," said Koichi Nosaka, a market analyst at
Securities Japan, Inc.
The euro <EUR=> fell around 1 percent to $1.3775, with
concerns about the cost of protection against Irish and
Portuguese government debt continuing to weigh on sentiment.
Currency tensions are high on the agenda at this week's G20
summit of advanced and developing economies.
A meeting in Seoul on Tuesday on key issues, including
exchange rates, ended inconclusively. Another session is
scheduled for Wednesday.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
G20 official fight over currencies []
G20 needs balanced growth system-Obama []
G20 battle lines: http://r.reuters.com/jux34q
Basel III; reshaping the rules:
http://r.reuters.com/zys68p
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The firmer dollar weighed on dollar-denominated commodities
prices.
Gold <XAU=> traded around $1,400 per ounce in Asia, a
slight uptick after losing $30 from the record high of
$1,424.10 on Tuesday.
Spot silver <XAG=>, which hit a record of $30 per ounce on
Tuesday, also partially recovered from a selloff, trading
around $27.50 per ounce.
U.S. crude futures <CLc1> slipped 10 cents to $86.82 per
barrel, backing off a two-year high on Tuesday.
(Editing by Neil Fullick)
