* Asia stocks firm, Europe seen opening higher
* Sterling down after overnight surge
* Yen holds near 13-yr peak against dollar
* China economic growth in 2008 slowest in 7 years
* Oil steadies after jumping above $44 overnight
(Repeats to more subscribers without changes in text)
(Updates prices, adds European outlook)
By Kevin Plumberg
HONG KONG, Jan 22 (Reuters) - Asia stocks rose on Thursday,
as investors snapped up beaten down bank shares and pinned
their hopes on policy action to support growth, but economic
gloom held the yen near a 13-year high against the dollar.
European stock index futures prices rose, tracking gains in
Asia and earlier on Wall Street following surprisingly positive
developments in the technology sector.
Though economic data remained dismal, analysts and fund
managers also believe that massive government spending and tax
cuts around the world will eventually trickle into economies,
maybe later this year.
"Investors are looking to the future, seeking out
industries that could benefit from government aid," said Zhou
Lin, analyst at Huatai Securities in Nanjing.
Although risk taking among investors returned suddenly
overnight, knocking down a closely followed market volatility
index <.VIX> 18 percent, uncertainty about medium-term
corporate earnings, global consumer demand and the banking
industry kept the element of fear high.
A slew of reports in Asia showed a rapid drop in growth and
collapse in export markets, suggesting it may be a while before
a recovery takes hold and provides support for investor
willingness to take risks. Chinese economic growth slowed to a
seven-year low in 2008 and Japanese exports had a record
decline in December.
"Across the region, a collapse in export growth has had
direct flow-on effects to industrial production, and we are now
seeing this start to impact employment, with household spending
the next in line," emerging market strategists at Royal Bank of
Canada said in a note.
Sterling fell back, having risen overnight on speculation
UK policy makers might take more aggressive action to support
their economy. []
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 1.5 percent though it remained close to a
one-month low touched earlier in the session.
Trading volumes were quickly thinning ahead of lunar new
year holidays across Asia next week.
Japan's Nikkei average <> closed 1.9 percent higher
after a late jump, boosted by property stocks when the Bank of
Japan said it would accept bonds issued by real estate
investment trusts as collateral for short-term cash.
Hong Kong's Hang Seng index climbed 2 percent, powered by a
5.3 percent rise in HSBC <0005.HK>. Shares of the largest
European bank had plunged for eight consecutive sessions to a
decade low on concern about the firm's access to capital.
However, sentiment remained fragile. For every positive
development, there seemed to be two more negative ones.
IBM <IBM.N> gave a rosier-than-expected outlook, though
Intel <INTC.O> said it was closing factories in Asia and
cutting 6,000 jobs and Sony Corp <6758.T> slashed its profit
outlook for 2008-2009.
However, given how badly corporate credit and almost every
stock market were sold off last year, some large asset managers
have begun to sift through corporate bonds and equities in
search of bargains. For FACTBOX, click on []
POUNDED
The British pound resumed a decline against the dollar back
towards 23-year lows, cutting gains made after a source told
Reuters that its slide will be discussed at the next meeting of
the Group of Seven nations.
Sterling was down 0.5 percent to $1.3913 <GBP=> after
dropping to near $1.36 on Wednesday.
"Sterling still looks far from hitting a bottom with
mounting expectations for further and bigger interest rate cuts
from the Bank of England to combat the quickly deteriorating
economy," said a senior trader at a Japanese trust bank.
The U.S. dollar was steady at 89.35 yen <JPY=>, after
rebounding from Wednesday's low of 87.10 yen, the lowest since
July 1995.
The euro slipped 0.3 percent to 116.30 yen <EURJPY=R>, and
remained well above a 7-year low of 112.08 yen hit on
Wednesday.
The yen's strength is causing increased concern among
Japanese exporters as it creates an extra hurdle for sales in
addition to waning global demand.
U.S. Treasuries, which have been in hot demand as the
credit crisis has kept investors in need of liquidity and
safety, rebounded after dropping overnight on worries about
upcoming debt supply to finance various U.S. rescue packages.
The yield on the benchmark 10-year note <US10YT=RR>, which
moves in the opposite direction of the price, slipped to 2.53
percent from 2.54 percent late in New York.
U.S. crude futures steadied on Thursday, after rallying
more than 6 percent the previous day, as traders weighed the
impact of recent OPEC supply cuts and a weaker dollar.
Crude futures for March deliver <CLc1> -- which took over
as the main front-month contract -- was nearly unchanged at
$43.59 a barrel.
(Additional reporting by Satomi Noguchi in TOKYO; Editing by
Neil Fullick)
