* Focus remains on U.S. Treasury stress tests
* Bank stocks mixed; tech shares gain
* Investor confidence at highest since July 08 - State
Street
By Kevin Plumberg
HONG KONG, April 22 (Reuters) - Asian stocks edged up on
Wednesday supported by the top U.S. Treasury official saying
most banks have adequate capital, but caution was likely to
reign until official results of "stress tests" were released on
May 4.
Treasury Secretary Timothy Geithner said most U.S. banks
have enough in reserve to keep lending, but the yen and U.S.
dollar rose nevertheless, with investors reluctant to push
commodity-related currencies higher until further clarity could
be reached on the banking industry. []
Despite financials in the S&P 500 rising 8 percent
overnight <.GSPF>, bank stocks in Asia were mixed with
investors cautious about prospects for further write-downs and
capital needs at banks around the world -- especially after the
International Monetary Fund said write-downs could reach $4.1
trillion.
"You have to ask yourself how long will enthusiasm for Mr.
Geithner's words last?" said Jan Lambregts, head of Asia
research for Rabobank Global Financial Markets in Hong Kong.
"Essentially, until May 4, we're waiting for results from
the stress tests. It's quite a messy process until then."
The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> was up 0.4 percent after a 1.5 percent fall on
Tuesday. Rolling 20-day returns for the index have been falling
in April, but at 8.4 percent are still higher than 3.6 percent
on the all-country world index <.MIWD00000PUS>.
Japan's Nikkei share average <> was essentially
unchanged, as gains in technology shares were offset by
declines in industrials.
Hong Kong's Hang Seng index advanced 0.7 percent, supported
by a 7 percent gain in CITIC Pacific <0267.HK> after the
conglomerate agreed to sell its stake in an Inner Mongolian
power company for $293 million.
After U.S. share futures finished Tuesday up between 1.5 to
2 percent, S&P 500 futures <SPc1> were down 0.4 percent,
indicating a lower open.
SOME CONFIDENCE RETURNS
Institutional investor confidence has strengthened after a
G20 meeting that bolstered the IMF, but still faces obstacles
to sustaining gains.
The State Street Investor Confidence index rose to the
highest since July 2008 in April, but the results of the U.S.
Treasury stress tests and the fate of unorthodox policy
measures by the Bank of England are near term headwinds.
"There are still many chapters yet to unfold before this
tragedy reaches its final page," State Street Global Markets
analysts said in a note. "However, the sub-plot of the
financial crisis and collapsing global equity markets may be
drawing to a resolution."
The dollar shed 0.3 percent to 98.40 yen <JPY=> after
gaining 0.8 percent on Tuesday. It hit a six-month high of
101.45 on April 6 but has gradually fallen since then.
The euro fell 0.4 percent to 127.30 yen <EURJPY=R> after
jumping nearly 1 percent on Tuesday.
Uncertainty about the European Central Bank's next monetary
policy move has kept selling pressure on the euro this month.
The ECB is expected to cut interest rates from 1.25 percent
to 1.0 percent in May but it is unclear whether it will follow
the Federal Reserve and other central banks and create money
via other means, such as buying corporate or sovereign debt.
U.S. Treasuries recovered some with stock futures slipping.
The yield on the benchmark 10-year Treasury note <US10YT=RR>
ticked down to 2.88 percent from 2.90 percent late in New York.
Industrial metals prices were mixed, but copper followed
equity prices higher. Copper traded in Shanghai for delivery in
July <SCFc3> rose 1.1 percent after hitting its daily limit
decline of 5 percent on Tuesday.
U.S. crude prices were up 0.6 percent to $48.82 a barrel
<CLc1> after an unexpected fall in U.S. supply. Oil hit a
one-month low of $43.83 on Tuesday.
(Editing by David Fox)
