* Japan joins euro zone, HK, Singapore in recession club
* Yen slips as stocks recover but not seen down for long
* Oil down near 22-mth low on demand fears
(Recasts, updates prices)
By Kevin Plumberg
HONG KONG, Nov 17 (Reuters) - Asian stocks mostly rose and
government bonds cut their gains on Monday, on hopes for more
government rescues of limping industries and as long-term
investors scooped up cheap shares.
However, oil prices dipped to within striking distance of
last week's 22-month low after policymakers from both emerging
and developed economies who met in Washington chose to leave
individual governments to tend their own backyards.
[]
Despite the small return of some risk taking, many
economies are buckling under the worst financial crisis in 80
years, with a report on Monday confirming that Japan has joined
a growing list of economies sliding into recessions.
[]
"For the time being, hopes that China will be able to
maintain its economic growth will lend some support to the
Asian markets," said Louis Wong, research director with Phillip
Securities in Hong Kong.
"There is still some downside risk though because the U.S.
will release economic data this week and also we will have
corporate earings from companies like Lowes and Dell."
Hong Kong's Hang Seng index <> rose 0.4 percent in
choppy trade, with shares of China Mobile <0941.HK> and HSBC
<0005.HK> leading the way higher.
Airline stocks such as Air China <601111.SS><0753.HK>,
China Eastern Airlines <600115.SS> <0670.HK> and China Southern
Airlines <600029.SS> <1055.HK> rallied on hopes they will get
government cash injections to cope with high costs and weak
demand. []
The MSCI index of Asia-Pacific stocks outside of Japan
<.MIAPJ0000PUS> fell 1.4 percent, extending last week's 9.7
drop. Year-to-date losses have piled up to around 57 percent.
Tokyo's Nikkei share average <> recovered from early
losses, rising 2.6 percent, as the yen fell and as long-term
investors snapped up cheap stocks. Some of the stocks lifting
the index, such as Takeda Pharmaceutical <4502.T>, were
so-called defensive plays, which were expected to perform
relatively well in a slowdown.
STOCKS CHEAP BUT DEMAND THIN
Many analysts were not predicted a near-term improvement in
market sentiment. Financial markets and economies remained
locked in a vicious circle, with weakness in one affecting the
other.
Equity capital flows into developed markets over the last
month were at near record lows, according to State Street
Global Markets analysts. Savage selling in global stock markets
has made prices very cheap but investors have not judged the
coast clear enough to buy wholesale yet.
"State Streets analysis of the long-run price-earnings
multiple suggests valuations are now at levels only seen in
extreme periods of dislocation such as the hyperinflationary
1970s and World War Two. However, stocks can stay cheap if
there is no demand to buy them," the analysts said in a note.
The yen fell against the euro and the U.S. dollar after a
report showed Japan's gross domestic product shrank by 0.1
percent in the July-to-September period and government
officials said the situation could worsen further.
However, with the process of widespread risk reduction
still very much intact, dealers did not expect the yen to stay
down for long.
The U.S. dollar rose 0.4 percent to 97.46 yen <JPY=>, and
the euro climbed 0.2 percent to 122.48 yen <EURJPY=>.
U.S. Treasuries pared earlier gains as equity markets
rebounded and U.S. stock futures flipped to positive on the
day. The benchmark 10-year note was unchanged, with a yield of
3.73 percent <US10YT=RR>.
U.S. light crude for December delivery <CLc1> fell about $1
to $56.06 a barrel, near the $54.67 a barrel low it hit on
Thursday, its weakest since January 2007.
"G20 leaders may have urged fast action to deal with the
global financial crisis, but concern over the weakened
international economic outlook still weighs heavily," said
David Moore, a commodities strategist at the Commonwealth Bank
of Australia.
The Group of 20 world leaders agreed Saturday to a raft of
fiscal and monetary steps to rescue the global economy, but it
was left to individual governments to tailor their response to
their particular circumstances.
(Additional reporting by Fayen Wong in PERTH and Fang Yan in
SHANGHAI; Editing by Lincoln Feast)
