* Japan c.bank considers additional monetary easing
* BHP continues to drag down regional index on take-over
bid
* Safe haven appeal of gold intact
By Sanjeev Miglani
SINGAPORE, Aug 19 (Reuters) - Japanese shares rose on
Thursday, outperforming the rest of Asia, and the dollar held
steady on a report that the Bank of Japan was considering new
monetary easing measures to weaken the yen's export-sapping
rise.
With a mixed performance overnight on overseas markets
offering few cues, shares moved in a narrow range across the
region as investors, particularly in Japan, picked up stocks on
dips.
"Until we get a clear sentiment shift, the markets are
still catering mostly to those with a very short-term trading
bias, or a very long-term perspective. For everyone in between,
the gut-wrenching could continue for awhile," Randy Frederick,
director of trading and derivatives for Charles Schwab, said in
a note.
The MSCI share index for Asia excluding Japan was up 0.1,
held down by tech-heavy Taiwan, where investors waited for GDP
figures later in the day worried that demand might slow down,
and Australia dragged lower by global miner BHP Billiton
<BHP.AX> following its hostile takeover bid for Canada's Potash
Corp <POT.TO>.
Japan's benchmark Nikkei <> rose 1 percent to
9335.24, prompting talk that pension funds were picking up
cheap stocks after the index hit an eight-month closing low
this week. The gains remained limited, though, by the yen's
strength.
"The Nikkei remains at a precarious level. If U.S. stocks
were to slide on some negative news again, the index could
easily go below 9,000," said Kenichi Hirano, operating officer
at Tachibana Securities.
Investors wait for a meeting between Prime Minister Naoto
Kan and Bank of Japan Governor Masaaki Shirakawa, and
speculation has heightened that the central bank may ease
monetary policy further ahead of the meeting, which is expected
to take place on Monday.
The most likely option under consideration is expanding the
BOJ's fund-supply tool introduced in December, Japan's Sankei
newspaper said, without citing sources. The December move
helped push down money market rates and subsequently weaken the
yen after it hit a 14-year high.
The dollar, appeared to draw some strength from the media
report on Thursday, holding steady against the yen at 85.75
<JPY=>, above a 15-year low hit last week. But the overall
reaction was limited as investors remained unsure what exactly
the Japanese authorities planned to do.
"If the BOJ announces only what the report is saying, it is
likely to disappoint the market. And there is a possibility
that the yen may even appreciate further," said Yuji Saito,
director at Credit Agricole's foreign exchange department.
The euro dipped 0.3 percent to 109.50 yen <EURJPY=R>,
edging back towards a seven week low of 109.07 yen hit on EBS
earlier this week.
Japanese government bonds were little changed on Thursday
as a wait-and-see mood prevailed with prospects of further
monetary easing by the Bank of Japan mostly priced in after an
extensive rally that has taken yields to seven-year lows.
The Australian dollar drifted lower on Thursday, as some
market players used uncertainty over the country's election as
an excuse to sell into recent gains amid cautious support for
risky trades as equities struggled.
Oil was under pressure on Thursday from a stronger dollar
and brimming U.S. petroleum inventories, after prices rebounded
from a six-week low a day earlier with rising stock markets.
U.S. crude for September <CLc1> dipped 11 cents to $75.31 a
barrel, after touching $73.83 on Wednesday, the lowest price
since July 7.
U.S. commercial crude and product inventories rose last week
to the highest level since the U.S. government began tracking
weekly data, statistics showed, a sign fuel supply is outpacing
demand amid a slow U.S. economic recovery.
Gold gained on Thursday after holdings in SPDR Gold Trust
<GLD.P> rose again, showing that the safe-haven appeal of the
metal remained intact amid volatile equities markets.
Spot gold <XAU=> added $1.35 an ounce to $1,228.90 an ounce
by 0052 GMT. It had rallied to $1,232.35 an ounce on Wednesday,
its strongest since early July, on technical buying and strong
physical demand.
(Additional reporting by Kaori Kaneko in Tokyo; Editing by
Tomasz Janowski)
