* Reuters Tankan shows corporate Japan mood darkens
* Gold falls back from record high
* Euro wavers, Irish budget seen next major market event
By Daniel Magnowski
SINGAPORE, Dec 7 (Reuters) - The dollar fell to a
three-week low against the yen on Tuesday, with gains in the
Japanese currency pulling Tokyo stocks lower, while the euro
came under renewed pressure as Europe struggled to contain its
debt crisis.
A flat close on Wall Street offered stock markets little
inspiration, while resurgent fears of an imminent Chinese
interest rate rise kept investors on the defensive.
In Japan, the benchmark Nikkei average was dragged
down by the strength of the yen, and a Reuters poll showed the
mood among Japanese manufacturers darkened in late November
and is expected to grow even gloomier in the coming months as
a strong yen and the global slowdown eat into profits.
[]
"The impact of a strong yen, slowing exports and declines
in profits weighed on corporate sentiment and companies are
growing more cautious about the outlook," said Yoshimasa
Maruyama, an analyst at Itochu Corp.
The Nikkei fell 0.4 percent, though Sumitomo Corp
and Mitsubishi Corp outperformed the broader index on
reports they are making moves to expand their rare earths
businesses. Non-Chinese sources of the hi-tech minerals are
much in demand, on worries the world's biggest supplier may in
future restrict exports.
MSCI's gauge of Asian stocks excluding Japan
rose 0.4 percent, taking its gains for the
year to over 12 percent versus 7.5 percent for the MSCI world
index .
Asia has been one of the chief beneficiaries of flows of
capital from the United States, where the Federal Reserve is
pursuing a policy of printing more cash.
But adding to the market's generally cautious tone was the
belief that the cost of borrowing in China will soon rise.
China's central bank may raise rates again this weekend as
it tries to contain inflationary pressures, official newspaper
the China Securities Journal reported on Tuesday.
[]
Another newspaper said Chinese bank lending had exceeded
by the end of November the government's full-year loan target
of 7.5 trillion yuan ($1.13 trillion), supporting arguments in
favour of further credit tightening.
POLITICAL BICKERING WEIGHS ON EURO
The euro slipped in early trade before recovering to
$1.3325, just above its late levels in New York on Monday,
with support seen at $1.3268.
The next major market event will be the outcome of the
Irish budget, due later on Tuesday, traders said., The deeply
unpopular government is set to unveil a record austerity plan
that will inflict more pain on voters. []
"If the (Irish) parliament fails to approve proposals, we
could see a fresh flare-up in euro zone tensions and the euro
could fall sharply against major forex counterparts," said
David Rodriguez, strategist at DailyFX.
Ireland last month received an 85 billion euro bailout
from the International Monetary Fund and European Union, and
markets are wondering if Portugal and Spain will be the next
ones in need of rescue.
Euro zone finance ministers met on Monday amid pressure to
increase the size of a 750 billion euro safety net for
debt-stricken members, but Germany rejected such a move and
also dismissed a call for joint euro bonds guaranteed by all
governments.
Gold traded at $1,420 per ounce, down slightly from
the previous session's $1,427, the most recent in a series of
peaks the precious metal has reached as investors buy heavily,
attracted by gold's perceived safety as a store of value, in
contrast to paper currencies. It has risen almost one-third
since the start of the year.
U.S. crude oil futures <CLc1> oscillated around $89 per
barrel after hitting a 26-month high in the previous session,
while benchmark industrial metal copper , which has
moved closer in recent sessions to its record high of almost
$9,000 per tonne, changed hands for just below $8,800.
(Additional reporting by Ian Chua in Sydney and Izumi
Nakagawa in Tokyo; Editing by Kim Coghill)
