* Corporate earnings, central banks in focus
* Asian stocks up 0.6 pct, Nikkei up almost 1 percent
* Euro holds near two-month high, Aussie down after CPI
By Daniel Magnowski
SINGAPORE, Jan 25 (Reuters) - Asian stocks rose on Tuesday,
with the Nikkei posting gains of almost 1 percent, on optimism
that companies will report strong earnings, while the euro held
near a two-month high.
The euro could get a further boost if the U.S. Federal
Reserve maintains a cautious view of the U.S. economic recovery
after a two-day policy meeting on Tuesday and Wednesday.
Markets are increasingly speculating that the European
Central Bank will lift interest rates ahead of the Fed, after
recent comments by ECB chief Jean Claude Trichet about the need
to keep inflation in check.
Japan's Nikkei average rose for a second straight
session, advancing 0.9 percent, lifted not only by gains in New
York and London overnight but by local optimism ahead of major
corporate earnings reports.
Exporters including Canon and Kyocera are
due to report this week, which could set the tone for earnings
season which will last until early February.
"This isn't going to be a regular earnings season," said
Masayoshi Okamoto, head of dealing at Jujiya Securities.
"Stocks have risen a lot over the quarter and strong
earnings are at least partly priced in by investors, so they
will not only want to see the figures for the quarter but also
how those firms can sustain growth in the long run."
Analysts expect the Bank of Japan, which ends a two-day
policy meeting, to keep monetary policy extremely loose, so the
focus will be on a review of its long-term forecasts.
The central bank is seen likely to raise its economic growth
forecast for the year to March, and may give signs that the
economy will resume a moderate recovery later this year.
The MSCI index of Asian stocks outside Japan
rose by 0.5 percent after recording its worst weekly performance
in almost two months last week. It is down 1 percent for the
month.
Shares of resource companies gained on a rise in industrial
metals prices, with the MSCI ex-Japan materials index up 1
percent.
Worries about mounting inflationary pressures have spooked
some investors into selling out of emerging Asian markets and
taking profits after record rallies in 2010, but rather than
leaving the region completely investors are channelling money
towards countries seen as better placed to deal with price
pressures.
Indonesian bond yields have jumped and stocks have retreated
as investors cut their holdings, worried that the country, one
of the darlings of emerging market investors in recent years,
does not have a tight grip on inflation.
Investors in major emerging markets are also closely
watching India's battle against stubborn inflation, which has
been aggravated by surging global commodities prices and
domestic supply pressures. The central bank is expected to raise
rates for the seventh time in a year at a meeting later on
Tuesday (0600 GMT).
EURO CLINGS TO GAINS
The euro held near a two-month peak in early Asian
trade, hovering around $1.37 and bringing into focus its next
resistance level of $1.3742.
The single currency, which has risen 6 percent in the past
two weeks, was supported by hopes for a lasting solution to the
debt crisis in the euro zone, and talk that the ECB may raise
interest rates.
Demand from Asian central banks has also spurred wider
buying in the common currency. .
The Australian dollar fell by around 0.3 percent on
weaker than expected consumer price data, strengthening
expectations that the central bank is likely to keep interest
rates unchanged for some time.
Positive sentiment across the broader economy knocked gold
lower, with the metal falling to a 10-week low as demand from
risk-averse investors waned.
Spot gold slipped to $1,330.45 per ounce, well down
from the record high of $1.430.95 it touched in December.
U.S. crude futures fell for the sixth day running,
shedding 35 cents at $87.51 per barrel mark, on expectations
that stockpiles in the U.S. were rising .
(Additional reporting by Antoni Slodkowski in Tokyo; Editing
by Kim Coghill)
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