* Gains in construction and tech stocks
* U.S. yields may rise more on selling from Japan insurers
* Oil extends losses after Gaddafi regains some more control
* Yen drops to session lows on intervention fears
By Saikat Chatterjee
HONG KONG, March 14 (Reuters) - Asian stocks outside Japan
edged up on Monday, with demand for commodity-related shares
offsetting the steep drop in Japanese markets following a
massive earthquake and tsunami.
Construction and refinery shares across the region saw
healthy demand on hopes of bigger profits because of large-scale
recontruction efforts as the country battled to prevent a
nuclear catastrophe after the natural disasters that may have
killed more than 10,000 people.
Seoul shares reversed early losses to turn positive,
helped by solid gains in technology and automaker counters
following news of production disruption by its Japanese peers
while stocks in Taiwan trimmed early falls.
"Tourism, shipping and insurance firms will clearly be hit
by shrinking demand from Japan," said Yu Rayming, chief investor
officer of Prudential Financial.
"However, the downside for the overall stock market would be
limited. Demand for oil refining, steel and cement issues will
rise due to rebuilding after the quake," he said, adding his
firm's funds bought these shares today.
But heavy losses in Japanese stocks and concerns over
developments in the country's damaged nuclear reactors prompted
investors to stay largely sidelined with safe haven themes such
as weaker stocks and higher gold likely to dominate in the near
term.
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Nuclear incident scale: http://r.reuters.com/cag58r
Map of reactors: http://r.reuters.com/dyf58r
Story on Japan Markets
SPECIAL REPORT-Can Japan find "New Deal"?
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"There are some investors buying on dips but overall
sentiment is still cautious especially with the nuclear
developments so we might see more volatility this week," Frances
Cheung, Asia-ex Japan strategist at Credit Agricole CIB said
referring to efforts by authorities to stem a broader fallout.
That spilled over to the rest of the region with Korean
nuclear power plant designer KEPCO down sharply
while shares in Australia's uranium miners slid as questions
rose on the near-term outlook of the industry.
The broader MSCI index of Asia-Pacific shares outside Japan
was up 0.2 percent after falling nearly 3
percent last week.
Japan's Nikkei share average closed down 6.2 percent
, the biggest single-day decline in two years, to the
lowest since November 2010.
TREASURIES WARY
U.S. yields nursed losses after Friday's spike but investors
grew wary of further selling pressure from Japanese insurers who
may sell some of their most liquid foreign assets such as U.S.
debt so they can respond to the earthquake.
Japan is the second-biggest holder of U.S. government debt.
Benchmark 10-year note yields were at 3.39
percent, up from 3.36 percent late on Thursday.
Brent crude fell nearly $2 to below $112 per barrel
after Libyan leader Muammar Gaddafi regained control of some
territory over the weekend in the country's civil war.
Wheat, corn and soy futures weakened as the quake
exacerbated an already-bearish mood circulating across
agricultural commodity markets in the past few weeks. Since
mid-Feb, the December 2011 CBOT wheat contract has fallen 18
percent.
However, massive reconstruction expectations pushed copper
prices above a three-month low hit on Friday.
In currency markets, the dollar rebounded from record lows
versus the yen after the Bank of Japan injected 7
trillion yen into the money market to help ease nervousness,
raising concerns that authorities might intervene to check sharp
gains.
Gold advanced by one percent nearing a record high of
$1,444.40 hit last week.
(Additional reporting by Clement Tan and Faith Hung in TAIPEI;
Editing by Kevin
Plumberg)
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