* Asia stocks edge up on lower oil prices, Wall Street
rally
* U.S. dollar strengthens, helping regional exporters
* Inflation pressures lurk as corn prices rise to record
By Kevin Plumberg
HONG KONG, June 16 (Reuters) - Asia stocks rose slightly on
Monday as the rebounding U.S. dollar boosted confidence in the
region's exporters, but government bonds fell on expectations
that central banks will raise interest rates to fight
inflation.
Oil prices slipped under $135 a barrel <CLc1> after United
Nations Secretary General Ban Ki-moon said Saudi Arabia, the
world's largest exporter, had told him it will boost output to
the fastest in decades. []
Along with U.S. inflation data that showed underlying price
pressures rose moderately in May, and the biggest weekly rise
in the U.S. dollar in three years, the easing in crude prices
improved the prospects of some of Asia's well-known exporters
such as Canon Inc <7751.T> in Japan and Samsung Electronics
<005930.KS> in South Korea.
"A softer yen sparked hopes for upward earnings revisions
for some exporters," said Takahiko Murai, general manager of
equities at Nozomi Securities in Tokyo.
"But we have to brace for an eventual dramatic slowdown in
Japan, where the stock market and the economy depend on
overseas demand, considering the recent declines in Asian
shares and rising inflation worries in emerging countries."
Japan's Nikkei share average <> climbed 1.6 percent
with the yen falling to a four-month low against the dollar.
South Korea's KOSPI <> rose 1 percent and Taiwan's
TAIEX <> jumped 1.3 percent, led by the technology sector.
The MSCI index of Asian equities <.MIAS00000PUS> rose 0.75
percent, after last week posting its largest decline since the
week of Aug. 19. Stocks in the Asia-Pacific region outside of
Japan were up 0.4 percent <.MIWD00000PUS>.
Equity markets in emerging Asia are viewed as particularly
vulnerable to high oil prices because many of the region's
central banks have had pro-growth policies for so long and
their exchange rate policies are tightly woven to the U.S.
dollar.
Last week Asia ex-Japan equity funds suffered the biggest
redemptions of any major fund group and saw money going out the
door for the eighth week in the last nine, according to EPFR
Global, a Boston-based research firm that tracks $11 trillion
in assets.
"Inflation was again the key driver of sentiment towards
Asia, with investors fretting about the combination of social
unrest, higher interest rates and weaker public finances
triggered by the rapid escalation of food and energy prices,"
said EPFR Global analysts in a note to clients.
Government bonds around the world continue to be sold off
on the view central banks are more concerned about the
inflationary effects of high oil prices than sluggish economic
growth.
The benchmark yield on the 10-year Japanese government
bond, which moves inversely to the price, rose to the highest
since July 2007, up 2.5 basis points to 1.890 percent
<JP10YTN=JBTC>.
U.S. Treasuries were relatively steady in Asian trade. The
two-year U.S. yield <US2YT=RR> last week had its biggest rise
in 26 years as investors scrambled to price in bets the Federal
Reserve could raise its benchmark interest rate this year.
Seventeen of the 31 central banks around the world tracked
by Reuters have raised their interest rates this year,
including China, India, Indonesia and the Philippines.
[]
U.S. light crude prices fell 74 cents to $134.12 a barrel,
$5 off from an all-time record of $139.12 hit earlier this
month.
The dollar was up 0.3 percent against the yen at 108.40 yen
<JPY=>, strengthening by 3 yen so far in June. The euro slipped
0.1 percent to $1.5388 <EUR=>.
U.S. corn futures <Cc1> rose more than 3 percent to a fresh
record high as flooding in the U.S. Midwest raised the chances
of reduced output from the world's largest corn exporter.
(Additional reporting by Aiko Hayashi in TOKYO; Editing by
Michael Urquhart)
