* Japanese plan to buy euro bonds lifts euro only briefly
* Gold rises on euro zone fears
* Japan's Nikkei stock index slips 0.2 percent
* All eyes on Portuguese debt auction on Wednesday
By Nick Macfie
SINGAPORE, Jan 11 (Reuters) - The euro languished near a
four-month low on Tuesday after a brief rally triggered by a
Japanese plan to buy euro bonds, while Asian stocks drifted,
fearful of Portugal becoming the next casualty of the euro
zone's debt crisis.
All eyes were on whether Lisbon would be able to raise
funds in the debt market on Wednesday, its first bond auction
of the year, or if soaring borrowing costs will force it to
turn to the IMF and European Union for help.
Japan offered a show of support for Europe's struggle with
debt, saying it would tap its euro reserves to buy bonds this
month for an Irish rescue plan, but the market doubted it
would provide much relief. []
"I don't think these comments (by Japanese Finance
Minister Yoshihiko Noda) change the backdrop for the euro at
all," said Todd Elmer, currency strategist for Citi in
Singapore.
"Despite the fact that we're seeing this groundswell of
international support, it doesn't really change or address the
underlying problem and that's not going to change until the
European authorities themselves come up with a more
comprehensive solution to mitigate the fallout from the debt
crisis."
Japan does not disclose the currency breakdown of its $1
trillion reserves and analysts think only a very small portion
is in euro.
The euro rose as high as $1.2992 on trading
platform EBS from around $1.2925 in early Asian trade, but
quickly pared its gains to stand little changed on the day. At
0551 GMT, it was below its 200-day moving average at $1.2940,
just above a four-month trough hit on Monday.
Tokyo's benchmark Nikkei index slid 0.3 percent on
worries about the euro zone and overnight weakness on Wall
Street, after hitting an eight-month closing high on Friday.
Tokyo markets were closed on Monday for a public holiday. The
broader Topix index was slightly higher.
The MSCI index of Asia Pacific stocks ex-Japan
inched up 0.2 percent, with Hong Kong's Hang
Seng Index up almost 1 percent.
Gold rose on worries about Portugal's debt, maintaining
bullion's appeal as a safety net. A softer dollar typically
helps gold because it makes the metal more affordable for
holders of the euro and other currencies.
Spot gold was up $1.35 at $1,375.80 an ounce at
0549 GMT. The focus for the metal was Portugal's Wednesday
bond aution.
Portugal is widely seen by investors as next in line in
the euro zone to need a bailout after Greece and Ireland, but
the government has repeatedly denied that it will seek foreign
financing.
The European Central Bank threw Lisbon a temporary
lifeline on Monday by buying some of its bonds, traders said.
[]
The Dow Jones industrial average lost 0.3 percent
on Monday, while the Standard & Poor's 500 Index edged
down 0.1 percent. The Nasdaq Composite Index gained
0.2 percent.
U.S. crude prices were steady above $89 on Tuesday as a
key Alaskan oil pipeline remained shut, cutting total crude
output by nearly 12 percent in the world's largest oil user.
(Editing by Kim Coghill)
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