* U.S. shares track Europe higher, banks and energy up
* Yen drifts down from fresh 15-year peak versus USD
* U.S. Treasuries down sharply on stock gains
(Updates with New York open, comment, new dateline, byline)
By Daniel Bases
NEW YORK, Sept 8 (Reuters) - U.S. share prices rebounded on
Wednesday, aided by gains in European markets, while the
stronger yen tested the Bank of Japan's resolve to cut the
currency down from its 15-year peak.
The force of safe-haven flows into the stable Japanese
currency has pushed it to the best levels against the U.S.
dollar since 1995. But the consequences have meant Japanese
exporters suffer, taking the benchmark Nikkei stock index down
2 percent on Wednesday, off 14.43 percent for the year
<>.
Shares in BP <BP.L> were among European gainers after it
issued a report shifting much of the blame for the Gulf of
Mexico oil spill -- the worst in U.S. history -- onto its
contractors Transocean <RIG.N> and Halliburton <HAL.N>.
Financial shares rebounded after a successful auction of
Portuguese debt eased concerns about European banks and
sovereign debt felt on Tuesday. []
U.S. stock markets, after suffering a sharp fall on Tuesday
as investors returned from a long holiday weekend, tracked
Europe's turnaround. Still, investors held their enthusiasm in
check ahead of a Federal Reserve report on the state of the
economy due at 2 p.m. EDT (1800 GMT).
"The sectors that were hit in the sell-off yesterday are
bouncing back," said David Chalupnik, head of equities at FAF
Advisors in Minneapolis. "And the lower dollar does help the
material and energy stocks."
In mid-morning New York trade, the Dow Jones industrial
average <> rose 71.14 points, or 0.69 percent, at
10,411.83. The Standard & Poor's 500 Index <.SPX> gained 8.64
points, or 0.79 percent, at 1,100.48. The Nasdaq Composite
Index <> climbed 20.69 points, or 0.94 percent, at
2,229.58.
The pan-European FTSEurofirst 300 <> index gained
0.95 percent. Shares of BP were up 1.59 percent
[]. Transocean slammed the report and Halliburton
officials were not immediately available for comment.
Banking shares also gained ground. In the U.S. JPMorgan
Chase <JPM.N> rose 2.35 percent, Bank of America <BAC.N>
climbed 1.36 percent, Wells Fargo <WFC.N> rising 1.28 percent.
MSCI's All-Country World index <.MIWD00000PUS> rose 0.52
percent.
YEN CONCERNS
In the currency markets, the yen eased back from its fresh
15-year peak against the U.S. dollar.
Bank of Japan Governor Masaaki Shirakawa reiterated his
reluctance to return to quantitative easing although he
indicated the central bank was weighing its options. Finance
Minister Yoshihiko Noda again warned he would take decisive
action if necessary. []
"Not surprisingly, more rhetoric from Japanese policymakers
has been unleashed, though the legitimacy of such talk is still
in question until we see some actual action," said Sacha
Tihanyi, currency strategist at Scotia Capital in Toronto.
The euro recovered from earlier losses against the
greenback. Earlier the Swiss franc reached an all-time high
against the euro on a flight-to-safety trade due to lingering
concerns about euro zone banks and sovereign debt.
One factor helping the euro rise was Ireland's finance
ministry saying nationalized lender Anglo Irish Bank will be
split into a funding bank and an asset recovery bank to wind
down its assets.
"Just the (Irish) announcement bought a little relief
rally" in the euro, said John McCarthy, director of foreign
exchange trading at ING Capital Markets in New York. "But
people are looking to sell the euros in substantial rallies as
issues such as sovereign debt in the euro zone have not gone
away."
Against the Japanese yen, the dollar <JPY=> was up 0.12
percent at 83.90 from a previous session close of 83.800.
The euro <EUR=> was up 0.59 percent at $1.2757 from a
previous session close of $1.2682.
The euro fell to a record low versus the Swiss franc of
1.2765 francs on EBS <EURCHF=EBS> after taking out the previous
day's record low and traders saw little chart support until
1.2700. The record low on Reuters data was 1.2766 <EURCHF=>.
Higher stocks led to benchmark 10-year U.S. Treasuries
falling 19/32 of a point in price and pushing the yield up to
2.66 percent <US10YT=RR>. An auction of $21 billion worth of
10-year notes also dampened the market.
December Bund futures fell to session lows on Wednesday,
tracking a sell-off in U.S. Treasuries. The contract, which
became the front month earlier in the session, fell as low as
131.24, 46 ticks lower on the day.
U.S. light sweet crude oil <CLc1> rose 31 cents to $74.40
per barrel. Spot gold prices <XAU=> rose $3.40, to $1258.30.
(Additional reporting by Rodrigo Campos, Nick Olivary, Jeremy
Gaunt, Neal Armstrong, Kirsten Donovan and George Matlock;
Editing by Andrew Hay)
