By Rafael Nam
HONG KONG, March 12 (Reuters) - Asian shares roared back to
life on Wednesday, sparking a 3 percent rally in Japan's
Nikkei, after the U.S. Federal Reserve and other central banks
teamed up to inject liquidity into strained credit markets.
The U.S. dollar steadied after it rallied on Tuesday from
record lows against the euro and near 8-year lows against the
Japanese yen.
Oil prices were steady in Asia, having backed off a record
high near $110 a barrel the previous day as the dollar rallied,
while gold prices continued a retreat from a record high seen
last week.
Asian bonds suffered as a rally on Wall Street emboldened
investors to turn away from the safe-haven of debt to look
again at the riskier-asset class of shares, though the rally in
equity markets was accompanied by cautionary notes from
analysts.
"The Fed's move will help ease tight credit conditions at
financial institutions, but it is not something that solves the
real problems," said Yutaka Miura, senior technical analyst at
Shinhko Securities in Japan.
Asian stocks have fallen hard this year and the dollar has
hit record lows against major currencies on fears the United
States is slipping into recession and the global credit crisis
could deepen.
The MSCI index of Asian stocks outside Japan
<.MIAPJ0000PUS> rose close to 3 percent, bouncing back after
hitting a seven-week low on Tuesday.
Japan's Nikkei average <> was up 3 percent, helped in
part by revised data showing the economy grew a surprisingly
strong 0.9 percent in the last quarter of 2007, matching a
provisional report and confounding expectations the figure
would be revised sharply down. []
Stocks in Australia <> jumped 3.6 percent, reversing
steep declines over the previous three sessions.
Singapore <.FTSTI> shares firmed more than 3 percent, while
stocks in South Korea <> and Taiwan <> shares rose
more than 2 percent each.
Financial stocks across the region such as South Korea's
Kookmin Bank <060000.KS> led gainers, while Japanese exporters
such as Toyota Motor Corp <7203.T> also rallied as the dollar's
firmer tone against the yen <JPY=> would boost export earnings.
The rise in Asian stocks came after major central banks,
led by the Federal Reserve, teamed up to get hundreds of
billions of dollars in fresh funds into cash-starved credit
markets. []
The moves will allow financial firms to use securities
backed by mortgages as collateral for central bank loans.
"The Fed's new mortgage put has, like the proverbial
butterfly flapping its wings, triggered a strong wind overnight
where we see even turkeys flying," wrote Brett Williams, a BNP
Paribas credit analyst to clients.
"Appetite for risk roared back from another creative
liquidity scheme by the U.S. central bank."
BOJ UNCERTAINTY
The coordinated moves by global central banks did not
include the Bank of Japan, which is in the midst of finding a
successor to governor Toshihiko Fukui, who retires next week.
Japan's upper house of parliament voted down on Wednesday
the government's nominee for that post, Toshiro Muto.
[]
The ailing U.S. dollar was steady after sharp gains on
Tuesday following the central bank news.
It fell back 0.3 percent to 103.10 yen <JPY=> in Asian
trade on Wednesday, but that was well above an 8-year low of
101.40 yen struck on Friday.
The euro barely budged from late U.S. trade at $1.5340
<EUR=>.
Tuesday's surge in the dollar contributed to a decline in
oil prices after they hit a record $109.72 a barrel earlier
that day.
U.S. crude futures <CLc1> fell in early dealings on
Wednesday before swinging to stand up 15 cents at $108.90.
Metals prices were steady following the previous session's
falls, with gold <XAU=> trading around $974.40 an ounce, up
slightly from around $971.40 in late trade in New York on
Tuesday. Gold had hit a record $991.90 on March 6.
Japanese government bond futures fell more than half a
point, pulling away from a 2-
