GLOBAL MARKETS-Asia stocks rally on Fed liquidity injection

                                
  (Updates prices, adds quotes, details)
                                
 By Rafael Nam
                                
 HONG KONG, March 12 (Reuters) - Asian shares rebounded on
Wednesday, with major indices gaining around 2 percent, after
the U.S. Federal Reserve and other central banks teamed up to
inject liquidity into strained credit markets.
                                
 The U.S. dollar was unable to sustain the strong rally that
had seen the currency rebound from record lows against the euro
on Tuesday, with many sceptical that the liquidity steps will
solve the fundamentals problems faced by credit markets.
                                
 Expectations the dollar may soon resume its slide stopped a
decline in oil prices, keeping U.S. crude futures within touch
of a record high near $110 a barrel, while gold edged higher
after its recent retreat from a peak hit last week.
                                
 "The Fed's decision to get funds for credit markets has
soothed investor sentiment since this eliminates the danger of
another lender getting short of cash," said Hwang Geum-dan, an
analyst at Samsung Securities Co.
                                
 "Fundamentals remain grim, and questions about where the
global economy and inflation are headed still remain
unanswered," she added.
                                
 The MSCI index of Asian stocks outside Japan
<.MIAPJ0000PUS> rose 2.3 percent as of 0402 GMT.
                                
 The benchmark hit a seven-week low on Tuesday, and is still
down 13 percent so far this year on fears of U.S. recession and
more writedowns in the global financial sector coming at the
same time when the region is grappling with rising inflation.
                                
 Japan's Nikkei average <.N225> rose 1.8 percent, helped by
revised data showing the economy grew a surprisingly strong 0.9
percent in the last quarter of 2007, confounding expectations
the figure would be revised sharply down. [ID:nT205169]
                                
 Stocks in Australia <.AXJO> rose 2.6 percent, reversing
steep declines over the previous three sessions.
                                
 Singapore <.FTSTI> shares firmed more than 2 percent, while
stocks in South Korea <.KS11>, Hong Kong <.HSI> and Taiwan
<.TWII> shares rose more than 1 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.
                                
 DOUBTS REMAIN
                                
 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. [ID:nN11555562]
                                
 The moves will allow financial firms to use securities
backed by mortgages as collateral for central bank loans.
                                
 But there still plenty of risk factors that could prevent
further gains, analysts warned.
                                
 A survey on Wednesday showed Australian consumer sentiment
slumped to its lowest in more than 14 years in March on the
back of rising interest rates and falling share values.
[ID:nSYD295929]
                                
 Retail sales in China held steady in January and February
at 20.2 percent, but Shanghai shares <.SSEC> fell 0.5 percent
as investors fear tightening measures after the country posted
on Tuesday its highest consumer price inflation in nearly 12
years.
                                
 Japan is facing headaches of its own, despite the
stronger-than-expected final estimate for the fourth quarter.
                                
 Analysts warn of a slowdown in the country's economy early
this year, while the world's second-biggest economy faces a
potential void atop the Bank of Japan at a time when central
banks are working together to help stem a global credit crisis.
                                
 Opposition lawmakers on Wednesday vetoed the Japanese
government's pick for central bank governor, Toshiro Muto,
leaving the country with no successor to Toshihiko Fukui one
week before he retires. [ID:nT24461]
                                
 DOLLAR SLIPS
                                
 The dollar edged down 0.4 percent to 103.00 yen <JPY=>,
reversing into its biggest one-day rise versus the Japanese yen
since August 2007 struck on Tuesday. The U.S. currency hit an
eight-year low of 101.40 yen on Friday.
                                
 The euro edged up 0.1 percent from late U.S. trade to
$1.5352 <EUR=>, not far from a record high of $1.5496 hit on
Tuesday.
                                
 "To many, the latest (central bank) measures merely address
the symptoms and not the cause of the credit crunch problem,"
analysts at DBS said in a research note.
                                
 "Like measures in the past, this exercise is seen as
another attempt to buy time."
                                
 U.S. crude futures <CLc1> steadied at $108.71, stopping a
drop that had seen prices retreat from a record $109.72 hit on
Tuesday, before the Fed announced its liquidity measures.
                                
 Gold <XAU=> firmed to $974.30/$975.10 an ounce, up from
around $971.40 in late trade in New York on Tuesday, and again
approaching the record $991.90 on March 6.
                                
 Japanese government bond futures steadied from earlier
sharp falls, with June 10-year futures <2JGBv1> down 0.07 point
at 139.43, recovering from an intraday low of 138.98.