* Asia stocks inch up to 1-mth high on big stimulus hopes
* Yen gains, risk aversion still widespread before year-end
* Sony says to slash 8,000 jobs, $1.1 bln of costs
By Eric Burroughs
HONG KONG, Dec 9 (Reuters) - Asian stocks inched higher on
Tuesday to hit a one-month high, but gains were kept in check
as hopes for big government spending to revive growth were
offset by investors shying away from risk in wrapping up a
brutal 2008.
U.S. crude oil prices <CLc1> were little changed at $43.65
a barrel after rebounding from a four-year low touched last
week, while Japanese government bonds lost ground.
Japan's Sony Corp <6758.T> said it will slash 8,000 jobs,
scale back investments and pull out of unprofitable businesses
as it aims to cut $1.1 billion in costs.
Britain's FTSE <> and Germany's DAX <> were set
to dip a little less than 1 percent at the open, according to
financial bookmakers.
"Reports about additional government support and economic
stimulus plans do help sentiment. But the economy is still in a
deep slowdown, and we will probably see more grim economic
data," said Kwak Joong-bo, a market analyst at Hana Daetoo
Securities in Seoul.
Global stocks bolted higher on Monday as U.S. authorities
thrashed out a rescue plan for struggling automakers and U.S.
President-elect Barack Obama said he would undertake the
biggest infrastructure spending since the 1950s.
The White House reviewed a Democratic plan to bail out the
automakers with $15 billion of loans. []
Investors are still debating whether the sharp sell-off
this year has run its course or there is worse to come as the
global economy slides into a deep recession that has already
claimed the three major regions: the United States, Japan and
the euro zone.
Data on Tuesday showed Japan's economy contracted at an
even faster pace than originally estimated during the third
quarter, showing the recession deepening and raising worries
the world's second largest economy faces its longest period of
contraction ever. []
"A lot of bad news is already expected, so the case for a
rally is good," said Malcolm Wood, Asia strategist for Morgan
Stanley in Hong Kong, adding that aggressive central bank rate
cuts and fiscal spending packages give some hope that markets
have bottomed out.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> clawed up 0.1 percent and reached a one-month
peak, a day after surging 7 percent, partly on hopes Chinese
economic leaders meeting this week in Beijing will approve more
stimulus spending.
Japan's Nikkei business daily reported that the government
is considering spending up to $216 billion to stimulate the
economy.
The Nikkei average <> gained 0.8 percent, with Sony's
announcement coming after the market close. []
HUNT FOR CAPITAL
The financial crisis is still forcing banks to hunt for
more capital, with banking shares in Australia taking a hit
after Westpac Banking Corp <WBC.AX> announced a $1.7 billion
share sale. The S&P/ASX 200 <> shed 0.8 percent.
[]
A rise in the yen showed that investors are still taking
advantage of any rebound in higher-yielding currencies to sell,
suggesting more market players are looking to close out
positions and raise cash holdings before year-end.
The yen tends to move in close synch with stocks due to its
role in the carry trade, which tends to attract more funds when
stocks are rising and market volatility falls.
The Australian dollar, a bellwether of investor willingness
to hold risky positions, dropped 1.7 percent against the yen
<AUDJPY=R> after having jumped the previous day along with the
rebound in equities.
The dollar dipped 0.3 percent to 92.55 yen <JPY=>, dangling
less than 2 yen above a 13-year low struck in October. But the
dollar index, a gauge of its performance against six major
currencies, rose 0.3 percent to 85.904 <.DXY> after sliding on
Monday.
Along with the yen, the dollar has also traded in close
tandem with stocks, gaining whenever there is a flare-up of
risk aversion.
The dollar has also soared as U.S. investors have
repatriated funds from their hefty holdings of foreign assets,
while hedge funds and others have scrambled to acquire the
dollar funding they need with money markets still largely
frozen.
But with financial markets starting to settle down, some
investors have taken profits on the rush into safe-haven
government bonds.
The yield on the benchmark 10-year Japanese government bond
<JP10YTN=JBTC> edged up half a basis point to 1.395 percent.
S&P futures <SPc1> pointed to a weaker U.S. open, helping
nudge Treasuries up in Asia. The 10-year note <US10YT=RR>
climbed 10/32 in price to yield 2.710 percent, down about 3
basis points from late U.S. trade but off Friday's 54-year low
of 2.510 percent.
(Additional reporting by Park Jung-young in Seoul and Xi Chen
in Hong Kong; Editing by Dhara Ranasinghe)
