* MSCI Asia-Pacific index gains, extend rally
* Many major indexes still fall though; analysts urge
caution
* Oil prices edge up, extending rally
* Euro hits one-month high against dollar
(Repeats to additional subscribers with no change to text)
(Updates with latest global prices, new quote)
By Rafael Nam
HONG KONG, Dec 11 (Reuters) - Asian shares gained on
Thursday as aggressive rate cuts and government actions to
revive economic growth improved confidence, but plenty of other
worrisome signals remained, supporting government bonds.
Oil extended the prior day's rally on signs Saudi Arabia
had slashed supplies to customers, while the U.S. dollar, which
had recently attracted strong demand due to its safe-haven
perception, fell to a one-month low against the euro.
Central banks are acting aggressively, helping ease some
concerns about the global economy, especially as inflation
drops worldwide. China on Thursday said the consumer price
index fell to a 22-month low. []
South Korea on Thursday cut interest rates by 1 percentage
point, helping Seoul shares and the won currency hit around
one-month highs. But plenty of uncertainties still remain, and
not all investors were willing to add on risk.
Expectations for sharply slower growth through 2009 and
renewed uncertainty about a U.S. auto bailout kept regional
bonds firm and European shares were seen inching lower. []
"As a slew of dismal economic indicators have shown, the
global economy is weak. We can't yet be optimistic," said
Yousuke Hosokawa, treasury department senior manager at Chuo
Mitsui Trust and Banking in Japan.
The MSCI index for Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> advanced 0.4 percent as of 0740 GMT, building
on the previous day rally of 4.5 percent.
Japan's Nikkei average <> rose 0.7 percent to mark its
fourth consecutive daily gain.
However, some major indexes in Asia such as in Shanghai
<> and Australia <> fell, hit by a mixture of
concerns about the global economy and uncertainty about whether
the U.S. Senate will now approve a rescue for auto makers after
the plan cleared the lower house of the U.S. Congress.
"The U.S. economy is faced by numerous problems that a Big
Three rescue is unlikely to solve," said Yoshio Takahashi, a
fixed-income strategist at Barclays Capital in Tokyo.
"The flight to quality into debt is thus unlikely to
subside."
Corporate news has added to worries about global growth.
Major companies worldwide such as Rio Tinto <RIO.AX> are
announcing steep job cuts as they seek ways to cope with a
crisis of a magnitude not seen in decades.
Taiwan <> ended flat, but South Korea's KOSPI <>,
gained 0.8 percent, and the won currency <KRW=> surged 2.6
percent against the dollar, after the central bank cut its key
interest rate by an unprecedented 100 basis points to a record
low 3 percent. []
FEARING 2009?
The low-yielding Japanese yen was mixed against major
currencies, with trading expected to remain slow ahead of the
end of a tough year. Few expect 2009 to be any better.
The Asian Development Bank said on Thursday growth in
developing nations in the region is seen slowing to an
eight-year low of 5.8 percent in 2009, joining the chorus of
increasingly pessimistic calls made from brokerages to
international bodies. []
The dollar fell 0.3 percent to 92.50 yen <JPY=> from late
U.S. trading.
The euro rose to as high as $1.3115 <EUR=> against the
dollar on trading platform EBS, the highest since late October,
reflecting that some investors are indeed willing to shed
safer-havens such as the U.S. currency. The euro was up 0.6
percent at 121.45 yen. <EURJPY=R>
Japanese government bonds (JGB) were steady to firm. The
worries about a deeper global recession are supporting demand
for safer, shorter-dated debt maturities.
The five-year JGB yield <JP5YTN=JBTC> dropped a basis point
to 0.900 percent, while the two-year yield slipped half a basis
point to 0.575 percent <JP2YTN=JBTC>.
Oil prices edged higher, extending gains by 70 cents to
$44.22 a barrel <CLc1>. OPEC is widely expected to announce
more output cuts at its meeting next week, with signs that top
oil exporter Saudi Arabia already pre-empting that outcome by
curtailing supply. []
(Additional reporting by Kaori Kaneko and Shinichi Saoshiro
in TOKYO; Editing by Lincoln Feast)
