* Stocks inch up; U.S. retail sales lift hopes for economy
* Yen retreats after rise on yuan talk
* S.Korea keeps rate steady for 14th mth; stocks down
* EM equity inflows at six month high -EPFR Global data
* Europe shares seen opening higher after sharp losses
By Aiko Hayashi
TOKYO, April 9 (Reuters) - Asian stocks edged closer to a
22-month high on Friday, supported by strong U.S. retail sales
data, while the yen retreated after rising the previous day on
talk that China was close to allowing a modest rise in the
yuan.
European shares were expected to open up between 0.4 and
0.7 percent after sharp declines on Thursday, while S&P index
futures <SPc1> were almost unchanged, indicating a flat start
on Wall Street later.
Spot yuan <CNY=CFXS> was flat against the dollar, showing
no sign that a rise was imminent after closing at its highest
level since October the day before on a New York Times report
that China was close to announcing a policy shift.
[]
China's central bank fixed the yuan's daily mid-point, or
reference rate, at a level almost the same as the previous day.
"The fixing dampened bullish sentiment towards the yuan
triggered by the New York Times report yesterday," said a
senior trader at a major Chinese state-owned bank in Beijing.
"But as the yuan has already been pushed to such a high
level of political attention, nothing can be ruled out, even a
one-off revaluation." []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Insider on yuan revaluation: http://link.reuters.com/xut96j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The report coincided with U.S. Treasury Secretary Timothy
Geithner brief visit to Bejing where he met Chinese Vice
Premier Wang Qishan and exchanged views on U.S.-China economic
relations and the global economy. [].
The MSCI's broad measure of shares in the Asia-Pacific
outside Japan <.MIAPJ0000PUS> rose 0.5 percent. It has gained
more than 4 percent since the beginning of the year and is now
holding up near levels not seen since late June 2008, just a
couple of months before the collapse of Lehman Brothers.
The index has neared 440 points this week, the 61.8 percent
Fibonacci retracement of its slide from a peak in November 2007
to its 2008 trough.
Hong Kong stocks <> rose 1.3 percent, nearing a
three-month high, as strong earnings from ZTE Corp <0763.HK>
and Tsingtao Brewery <0168.HK> and hopes of appreciation in the
yuan lifted mainland shares.
Seoul shares <> slipped 0.5 percent as a strengthening
won <KRW=> dented appetite for key exporters such as Hyundai
Motor <005380.KS>, while reaction to the Bank of Korea's
decision to hold its interest rate was limited. []
Tokyo's Nikkei average <> rose 0.3 percent, boosted by
strong earnings guidance from the likes of popular casual
clothing chain Fast Retailing <9983.T>, but gains were capped
due to profit-taking after the benchmark's recent rally to
18-month highs. []
The Nikkei has risen about 6 percent so far this year.
Better-than-expected U.S. retail sales data helped support
sentiment, but gains are likely to be kept in check ahead of
U.S. earnings next week from heavyweights such as Intel Corp
<INTC.O> with investors mindful of longer-term uncertainty
about the U.S. economic recovery and simmering worries about
debt-laden Greece.
"Though market attention has shifted to earnings, the
Japanese season doesn't really get going for another two weeks,
meaning the market may search for direction," said Kenichi
Hirano, operating officer at Tachibana Securities in Tokyo.
On Thursday, top U.S. chains reported a record
year-over-year increase in same-store sales for March, sending
the S&P 500 Index <.SPX> 0.3 percent higher. The sales
reflected a boost in consumer demand that some investors had
doubted would materialise, with job growth still anaemic.
[]
The U.S. dollar rose 0.3 percent to 93.65 yen <JPY=> after
the market found solid bids below 93 yen on Thursday when it
fell as far as 92.83 yen. Asian currencies are seen likely to
gain from any move by China to revalue its currency.
[]
The yen came under pressure on news that Prime Minister
Yukio Hatoyama was to meet Bank of Japan Governor Masaaki
Shirakawa, with the market looking for any signs of pressure
from the government for more monetary policy easing to fight
deflation.
In the event, they exchanged views on the economy and
financial situation but Shirakawa said Hatoyama made no
requests. []
The euro rose earlier as investors trimmed record-high
short positions, but it struggled to keep those gains as
worries about Greece simmered in the background.
The single currency dipped 0.1 percent to $1.3372 <EUR=>,
having lost about 7 percent since the beginning of the year.
Commodity prices were steady, with U.S. crude futures
<CLc1> up at about $86 a barrel, after falling the two previous
days, while gold <XAU=> hovered near a 3-month high.
JGB futures <2JGBv1> edged up as very long-dated cash bonds
gained early on new fiscal year purchases by investors,
although they later retreated.
Mitsui Life Insurance Co said in an interview with Reuters
on Thursday that Japan's fifth-largest life insurer is likely
to buy 100 billion yen ($1.07 billion) in superlong bonds in
the current financial year. []
Investor interest in emerging markets and their commodities
stories jumped during the first week of April, data from fund
tracker EPFR Global showed on Thursday, with flows into
emerging markets equity funds it follows hitting a 24-week
high.
Emerging markets bond funds extended their inflow streak to
22 straight weeks and commodity funds absorbed another $265
million, EPFR said, but Japan equity funds posted outflows for
the first time this year as a stronger yen and disappointing
business investment numbers offset bullish expectations for the
first quarter earnings season.
(Additional reporting by Satomi Noguchi and Elaine Lies in
Tokyo; Editing by Tomasz Janowski)
