* MSCI Asia-Pacific ex-Japan falls most in a week in 2 mths
* Bank of America close to getting more cash from
Washington
* Euro recovers after rate cut but outlook uncertain
(Repeats item to more subscribers without changes in text)
By Kevin Plumberg
HONG KONG, Jan 16 (Reuters) - Asian stocks rose on Friday,
reducing demand for government bonds, after a volatile week in
which mounting global economic damage stung investor confidence
and set up shares for their biggest weekly decline in two
months.
Investors have been taking advantage of windows of calm to
rebalance portfolios and even scoop up some bargains, but
overall risk taking for higher returns was tame in the face of
official warnings of more economic pain to come, drastic cost
cutting by companies and data reflective of a global recession.
Wall Street rose slightly on Thursday on relief that a lot
more U.S. government money is likely to be used to soften the
blow of a recession already a year old.
Bank of America Corp <BAC.N> was reportedly close to
receiving more emergency cash from Washington, as the cost of
the financial crisis kept rising. []
Oil prices stabilised around $35 a barrel but remained
under medium-term pressure on expectations energy demand will
continue to decline because of sharply falling global
industrial output.
"We all know there will be a little bit more pain before
the market finds its way. This whole market last year has been
about confidence levels. That's been shaken and it will take
some time to recover," said Lucinda Chan, division director at
Macquarie Equities in Sydney.
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> climbed 1.8 percent, but was heading for its
biggest weekly fall since the week of November 23.
The index on Thursday hit its lowest since Dec. 8.
Japan's Nikkei share average <> rose 1.3 percent, with
shares of large exporters giving the index a boost thanks to a
slightly weaker yen.
Hong Kong's Hang Seng index <> was dragged down 0.8
percent by a 3.7 percent drop in HSBC shares <0005.HK> after
Goldman Sachs cut its rating on the stock to sell from neutral,
citing expectations for 2009 losses.
Bank losses will be in focus later on Friday when Bank of
America and Citigroup Inc. <C.N>, once titans of American
banking, report fourth-quarter results.
Their shares fell sharply on Thursday as the two faced
pressure from investors who question how they can continue to
absorb growing losses from bad loans.
DEBT DIPS
With share markets in Asia rising, investors turned away
from assets, such as bonds, deemed as safe havens.
The yield on the benchmark 10-year U.S. Treasury note
<US10YT=RR>, which moves inversely to the price, ticked up to
2.24 percent from 2.21 percent late on Thursday. However, the
yield is still a whopping 167 basis points below levels in
November.
March 10-year Japanese government bond futures slipped 0.13
point <2JGBv1> after hitting the highest for a lead contract
since Sept. 16, just after the collapse of Lehman Brothers.
In currency markets, the euro climbed against the yen,
following the rebound in shares. But some analysts were
concerned about the euro's prospects on concern that the
European Central Bank may not be acting aggressively enough to
support growth.
The euro climbed 0.4 percent from late New York trade to
118.25 yen <EURJPY=R>, bouncing further from a six-week low of
116.24 yen the previous day.
The euro rose 0.4 percent to $1.3162 <EUR=>, above a
five-week low of $1.3025 hit on Thursday after the ECB cut
rates by a half percentage point to 2 percent, matching a
record low rate. []
"The euro could have rebounded to much higher levels by the
end of yesterday if the ECB had been more successful in
providing market confidence about the euro zone economy ahead,"
said Minoru Shioiri, chief manager of forex trading in
Mitsubishi UFJ Securities in Tokyo.
"There is still no clear picture provided in the market to
support aggressive euro-buying," Shioiri said.
U.S. crude for February delivery <CLc1> dipped 10 cents to
$35.30 a barrel, after sliding $1.88 to $35.40 on Thursday. The
contract, which expires on Tuesday, touched the lowest since
Dec. 19 overnight.
OPEC on Thursday forecast a fall of 180,000 barrels per day
in world oil demand this year, 30,000 bpd steeper than its
previous forecast. []
