RPT-GLOBAL MARKETS-Asia shares rally on US data, yen weakens

                                
 * Japan stocks rise nearly 3 pct to two- week highs
                                
 * Yen flounders as new leadership seen favouring its
weakness
                                
 * European debt concerns raise doubts about rally
sustaining
                                
 (Repeats to more subscribers)
                                
 By Umesh Desai
                                
 HONG KONG, June 3 (Reuters) - Asian stocks rose for the
first time in three days on Thursday as U.S. housing data
fueled optimism about the world's largest economy, while the
yen was pressured by expectations that Japan's new political
leaders will favour a weaker currency.
                                
 Solid sales growth for May from major U.S. automakers also
helped the auto sector in Japan, while stocks in Seoul received
an additional boost from foreign buying.
                                
 Tokyo's Nikkei share average surged 2.6 percent <.N225> to
its highest in nearly two weeks, as exporters received a leg-up
from the upbeat economic data in the United States, one of
Japan's biggest export markets, with the weak yen also helping.
                                
 Honda Motor <7267.T> and Toyota Motor <7203.T> both rose
3.7 percent.
                                
 In Seoul, the Korea Composite Stock Price Index <.KS11>
(KOSPI) was up 1.4 percent, its highest in over two weeks with
foreign buying of a net 123 billion won ($102 million) worth of
stocks, after selling on Tuesday. The Seoul market was closed
on Wednesday for a public holiday.
                                
 "U.S. shares' strong gains on Wednesday have helped ease
broader external worries about the euro zone's debt issues and
consequent economic slowdown, boosting appetite for risk once
again," said Park Suk-hyun, a market analyst at KTB Securities.
                                
 U.S. stocks rallied more than 2 percent after pending sales
of previously owned U.S. homes topped expectations in April to
hit a six-month high, and as investors rushed back to heavily
sold sectors such as energy, looking for bargains.
[ID:nN02163984]
                                
 Economists are hoping for a strong U.S. non-farm payrolls
report on Friday, suggesting a broadening economic recovery
will be able to weather Europe's debt storm. [ID:nLDE6511IX]
                                
 On Thursday, the MSCI index of Asia Pacific ex-Japan stocks
<.MIAPJ0000PUS> was up 2.4 percent, led by resources and
materials stocks materials <.MIAPJMT00PUS> and financials
<.MIAPJFN00PUS>
                                
 The yen's woes continued following a two-week low struck
against the U.S. dollar on Wednesday after Japanese Prime
Minister Yukio Hatoyama and his deputy resigned to try to boost
the ruling party's faltering fortunes in an election next
month.
                                
 Finance Minister Naoto Kan, who is tipped to be the
successor, surprised markets earlier this year by saying he
wanted the yen to weaken more and that most businesses favoured
a dollar/yen rate around 95 yen.
                                
 In Asia trade, the dollar inched up 0.1 percent to 92.20
yen <JPY=>, hovering near a 2-week high of 92.36 yen hit the
previous day. The weaker outlook for the yen benefitted the
floundering euro also, with the single currency rising 0.4
percent to 113.26 <EURJPY=R>.
                                
 Despite Thursday's rally in riskier assets, investors
remained wary as Europe's debt problems continued to fester.
                                
 "That (the market bounce) is not to say concerns toward the
euro zone have ebbed. The situation continues to be watched
with caution following the recent rise in Spain's short-term
yields," said Shoji Yoshigoe, a senior investment strategist at
Mitsubishi UFJ Morgan Stanley Securities.
                                
 Spanish Prime Minister Jose Luis Rodriguez Zapatero said on
Wednesday the government would present long-awaited labour
market reforms on June 16 whether or not it had reached a deal
with unions and employers.[ID:nLDE6511L8]
                                
 Bank of Japan policy board member Miyako Suda highlighting
the risks to the Japanese economy amid concerns that Europe's
problems and the ensuing market turmoil could hurt Japan.
[ID:nTKZ006446]
                                
 Debt-laden Greece outlined plans to raise more than 3
billion euros by selling stakes in some of its struggling
state-run businesses but said it will hold back its more
attractive assets.[ID:nLDE6511ZX]
                                
 "We would be more convinced of the rally's durability if it
were accompanied by falling Western European Sovereign CDS,"
said a client note from ING Bank.
                                
 Overnight, The Markit SovX Western European index of credit
default swaps <ITXWE5Y=MP> widened 7.5 basis points to 154.5
bps. It is just off the record peak of around 170 bps struck
last month.
                                
 U.S. oil futures prices <CLc1> rose as much as $1.03 to
$73.89 a barrel after an industry group reported U.S. crude
inventories fell more than expected last week. [O/R]
                                
 Safe haven U.S. Treasuries were steady despite the sharp
rise in demand for riskier assets, indicating there were
investors who remained suspicious of the rally.
                                
 Benchmark 10-year notes <US10YT=RR> are yielding 3.34
percent after rising 7 bps overnight. They are still far below
the high of 4.00 percent hit in early April.
                                
 Gold <XAU=> prices fell on speculative selling but an
increase in ETF holdings to another record suggested demand
from investors remained firm.
 (Additional reporting by Shinichi Saoshiro in TOKYO and
Jungyoun Park in SEOUL)
  (Editing by Kim Coghill)