* Dlr/yen at 8-mth low, Japan finmin says move "not
abnormal"
* Asia-Pacific stocks down; outperform Nikkei's 2.4 pct
fall
* Dollar index gains on safe-haven buying, bond yields drop
By Eric Burroughs
HONG KONG, Sept 28 (Reuters) - The yen surged to an
eight-month high against the dollar on Monday as Japanese
officials waved off any plans to stem the currency's rise,
driving the Nikkei down more than 2 percent and sparking a
broad retreat in risky assets.
The yen's jump against the dollar has it poised to make a
run at the 13-year peak of 87.10 struck earlier in the year,
with the rise through levels that Japan's big exporters had
planned for this financial year hitting their shares.
The Japanese currency's climbed as senior officials again
made clear they were not considering intervention to stem the
rise at this point, with Finance Minister Hirohisa Fujii
telling Dow Jones Newswires that the rise was "not abnormal".
[]
Fujii later said yen moves were becoming one-sided and
stable moves were desired, but market players were more focused
on the hands-off aspect of his remarks. []
Those comments reinforced the perception that the new
ruling coalition is taking a different tack on currency policy
than its predecessor and that Japan is no longer as
trigger-happy as it once was, having spent about $400 billion
to protect its fragile economic recovery in 2003 and 2004.
"There is little caution towards the government
intervention at the moment because Japanese authorities say
they are not thinking about taking action," said Hideki
Hayashi, global economist at Mizuho Securities in Tokyo.
"In the longer term, the dollar could resume its slide
against the yen if data, such as U.S. jobs later this week,
points to a subdued recovery.
The Nikkei share average <> shed 2.4 percent in
morning trade to hit a two-month low and briefly fell below the
10,000 line. Among exporters, Honda Motors <7267.T> fell 5.3
percent and electronic parts maker Kyocera Corp <6971.T> lost
2.6 percent -- among the biggest drags on the index.
The dollar fell as far as 88.23 yen <JPY=> on trading
platform EBS before trimming losses to 89.33 yen, down 0.3
percent on the day. The yen staged broad gains, with the euro
down 1.1 percent at 130.25 yen <EURJPY=R> and sterling shedding
1.4 percent to 141.10 yen <GBPJPY=R>.
Other Asian equity markets also retreated, but losses were
smaller than those in Japan. The MSCI benchmark of Asia-Pacific
shares outside Japan <.MIAPJ0000PUS> fell 1.4 percent. South
Korea's KOSPI index <> was down 1 percent, while Taiwan's
TAIEX <> dipped 0.9 percent.
Some foreign investors were also pulling funds out of Asian
stock markets before quarter-end, partially reversing some of
the heavy buying that has taken place over the past six months
on bets favouring the region's growth prospects.
Foreign investors were sellers for a third consecutive
session in South Korea on Monday.
"Without strong buying by foreign investors, markets are
turning lower, and weaker-than-expected U.S. economic data are
weighing on sentiment," said Choi Seong-lak, a market analyst
at SK Securities in Seoul.
Weaker-than-forecast reading of U.S. housing sales and
durable goods orders on Friday pushed the U.S. S&P 500 index
<.SPX> down 0.6 percent on Friday. S&P futures <SPc1> were down
0.3 percent in Asia trade.
Commodity prices also came under pressure.
U.S. crude oil shed 43 cents to $65.59 <CLc1>, extending
last week's 8.4 percent slide after data showing a build-up of
U.S. inventories raised worries about the strength of demand.
Gold prices dipped 70 cents to $990.25 <XAU=>, partly as
the dollar staged a broad rebound despite its losses against
the yen.
The dollar index, a gauge of its performance against six
major currencies, was up 0.8 percent at 77.136 <.DXY>. The euro
slid 0.8 percent to $1.4580 <EUR=>.
The drop in equities propped up government bonds. The
benchmark 10-year Japanese government bond yield <JP10YTN=JBTC>
fell 2.5 basis points to 1.285 percent, while the U.S. 10-year
Treasury note <US10YT=RR> dipped 2 basis points to 3.307
percent.
(Additional reporting by Rika Otsuka in Tokyo and Jungyoun
Park in Seoul; Editing by Tomasz Janowski)
