* Asia stocks headed for best weekly returns of 2010 so far
* Commodities in bull run, anticipating more USD weakness
* Investors buy now, worry about QE2 consequences later
(Repeats to more subscribers)
By Kevin Plumberg
HONG KONG, Nov 5 (Reuters) - Asian stocks climbed for a
fifth day on Friday, with commodity-related shares putting
markets in the region on a path to outperform other parts of
the world this week after Federal Reserve action revived a move
into riskier assets.
The Fed's long-awaited $600 billion bond-buying scheme
unveiled on Wednesday has resulted in a scramble to buy laggard
sectors of equity markets as well as commodities and a shift to
shorter-dated debt on bets the injection of cheap dollars will
keep a reflation trade going.
The October U.S. payrolls report due later on Friday is
expected to reflect growth of 60,000 jobs, which while a
relatively small amount would be the first increase since May
and enough to keep the risk rally going. []
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For a preview of the U.S. payrolls data, click
http://r.reuters.com/myk83q
For a PDF on the Fed's big gamble, click
http://r.reuters.com/cyh73q
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The ultimate consequences of the new round of quantitative
easing are clear to many analysts, namely greater risks of
capital controls in emerging markets, asset price bubbles and
quickening inflation.
For now though investors have been putting cash to work in
search of higher returns and worrying about the backlash later.
Japan's Nikkei share average <> led gains in Asian
stocks a second day, rising 2.7 percent, with big exporters
among the supporting factors for the index.
"Short-covering is the main driver of today's gains, but
foreign investors appear to be picking up shares of companies
that are sensitive to economic cycles such as trading houses
after rallies in oil and gold," said Hiroaki Kuramochi, chief
equity marketing officer at Tokai Tokyo Securities in Tokyo.
The MSCI index of Asia Pacific stocks outside Japan was up
0.9 percent <.MIAPJ0000PUS> in early trade, led by a 2.1
percent jump in resource shares <.MIAPJMT00PUS>.
The index is up around 5 percent so far this week, on
course for the biggest weekly rise of the year.
Hong Kong's Hang Seng index <> has been a high flyer
and opened up 1.5 percent to its highest since June 2008.
The U.S. dollar index <=USD>, a measure of its performance
against a basket of six other major currencies, held near an
11-month low, while the euro was steady at $1.4205 <EUR=>,
having risen to the highest since January overnight at $1.4283.
Chronic weakness in the dollar has been a prime factor
lifting commodity prices across the board.
Three-month copper futures traded on the London Metal
Exchange was up 1.5 percent <CMCU3> to the highest since July
2008, having risen an unrelenting 20 percent since August.
"I think the dollar weakness is not over for this quarter.
In the coming two months we might see further gains (in
metals)," said Peter Fertig, analyst at Quantitative Commodity
Research.
Crude oil futures were also in the midst of a bull run,
with the December contract up 0.5 percent to $86.88 a barrel
<CLc1>. December oil may try to hurdle the May 3 high of $87.15
a barrel throughout the global day, above which oil would be at
its highest since October 2008.
(Additional reporting by Aiko Hayashi in TOKYO)
(Editing by Kim Coghill)
