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* China stocks up on bank gains ahead of AgBank IPO
* Aussie, euro positive; Australia rates on hold as
expected
* Asia stocks ex Japan off 1-mth low; Nikkei off 7-mth lows
* Data on rise in China's JGB buying helps yen
* European shares seen up slightly, lack U.S. lead
By Aiko Hayashi
TOKYO, July 6 (Reuters) - Asian stocks reversed course and
inched up on Tuesday taking heart from gains in the Chinese
market led by property and bank stocks, while the Australian
dollar dribbled higher after the central bank sounded
cautiously optimistic on the economic outlook.
European shares are expected to open slightly higher after
falling to their lowest close in nearly six weeks the previous
day. There was no lead from Wall Street, which was closed for
the Independence Day holiday. []
Stock markets cheered gains in Shanghai, the world's
second-worst performer after Athens. The Shanghai market has
lost 27 percent since the start of the year, after Beijing
introduced a range of policies to cool the real estate fever.
"A rise by Shanghai stocks and a pullback by the yen helped
soothe market sentiment," said Kazuhiro Takahashi, general
manager at Daiwa Securities Capital Markets.
"But a strong trend is difficult to emerge (in Tokyo) as
the market has been thinly traded as the United States was on
holiday yesterday. The market will need a stronger incentive to
establish a clearer trend."
A liquidity squeeze has dragged on investor sentiment in
China, particularly with a flood of issuances this week,
including AgBank's initial public offering and concerns over
further bank fundraising. []
Analysts said investors were buying banking and property
shares ahead of pricing of AgBank's $20 billion IPO on
Wednesday.
Australia's central bank left the cash rate at 4.5 percent
as expected, and said it was waiting further information about
the international economy and domestic demand as it considers
future policy moves. []
The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> reversed direction and rose 1 percent on gains
in financials.
After data showing the U.S. labour market shrank for the
first time this year in June, slower Chinese manufacturing
activity and euro zone austerity policies had fuelled investor
concerns over prospects for the global economy.
That sent European shares to their lowest close in nearly
six weeks on Monday and Asia stocks to a one-month low earlier
in the day.
Australian dollar <AUD=D4> rebounded to a high of $0.8432
from early losses against the dollar and yen after a statement
by Australia's central bank helped dispel some gloom about the
economic outlook and led to short-covering.
The bank kept its interest rate unchanged at 4.5 percent,
as expected, and said the global economy had continued to
expand, albeit unevenly, with growth in Asia very strong and
signs of China moderating to a more sustainable rate.
[]
The euro <EUR=> swung into positive territory, up 0.1
percent at $1.2546, on the trading platform EBS, while the
single currency inched up to 110.20 yen <EURJPY=R> after small
falls.
The yen earlier gained ground helped by news that China has
expanded JGB buying. Japanese finance ministry data showed
China has boosted its buying of Japanese government bonds this
year, snapping up a net $6 billion of mostly short-term notes
between January and April, double the record amount logged for
all of 2005. []
Japan's benchmark Nikkei <> rose 0.8 percent to
9,338.04, climbing above 9,200, which is one support at a key
retracement level, as beaten-down shares of Japanese exporters
such as Canon Inc <7751.T> recouped ground.
The index earlier fell more than 1 percent to hit its
lowest in seven months.
The Shanghai composite <> was up 1 percent.
Mainland-listed real estate developers rose, boosted by strong
results from Shenzhen-listed China Vanke Co <000002.SZ>.
[]
An auction of 10-year Japanese government bonds attracted
bids 2.76 times the amount of offers accepted, the lowest in
three months, but the tail tightened, indicating decent demand
for the new offer.
Lead 10-year September JGB futures <2JGBv1> were down 0.03
point at 141.54, little changed after the auction results
announcement. []
Oil extended losses to four-week lows near $71 after a raft
of negative economic indicators over the past week undermined
confidence about growth in energy use.
(Additional reporting by Elaine Lies and Shinichi Saoshiro in
Tokyo; Editing by Jan Dahinten)
