* Nikkei rises 3 percent, down around 7.5 pct since quake
* Yen softer around 81 per dollar, market on intervention
watch
* Asia shares edge up, U.S. stocks gain 1.5 percent on M&A
* Oil rises on Middle East supply worries
By Alex Richardson
SINGAPORE, March 22 (Reuters) - Japanese stocks jumped
nearly 4 percent on Tuesday amid reports of progress in
stabilising an earthquake-damaged nuclear plant, and the yen was
broadly weaker on the prospects for further intervention by
major central banks.
Shares elsewhere in Asia posted modest gains, after bouncing
on Monday when Tokyo markets were closed for a holiday. Support
came from U.S. stocks, which were buoyed on Monday by AT&T's
move to buy Deutsche Telecom .
"People are getting a bit more relaxed, the Japan situation
seems to be getting under control and it is a case for
rebuilding now," said Martin Angel, a dealer at Patersons
Securities in Australia.
Oil prices edged up, following a 1 percent rise in the
previous session as widening unrest in the Middle East
intensified fears of supply disruptions.
Gold also edged higher supported by a weak dollar and
violence in the Middle East that boosted its safe-haven appeal.
MSCI's index of Asia-Pacific shares outside Japan
rose 0.3 percent, bolstered by arise in the Dow
Jones industrial average and broader S&P 500 of
1.5 percent.
Tokyo's Nikkei share average rose 3 percent, while
Nikkei futures traded in Osaka and Chicago
posted similar gains.
"Global value funds together with long-only investors are
piling right in the middle of the index today, chasing big,
liquid stocks attracted by cheap valuations," said Tetsuro Ii,
CEO of Commons Asset Management.
The Nikkei is trading at a price-to-book ratio of 1.1,
appealing to value investors , compared with 2.2 for
the U.S. benchmark S&P 500, Thomson Reuters Starmine data shows.
The Nikkei is down around 7.5 percent from its close on
March 11, the day northeastern Japan was struck by a 9.0
magnitude earthquake and a 10-metre tsunami that left at least
21,000 people dead or missing and crippled a nuclear power
plant.
On Tuesday, technicians working inside an evacuation zone
around the stricken plant 240 km (150 miles) north of Tokyo had
managed to attach power cables to all six reactors and start a
pump at one of them to cool overheating nuclear fuel rods.
But rising smoke and haze from two of the most threatening
reactors suggested the battle to avert a disastrous meltdown was
far from won, and mounting evidence of radiation in vegetables,
water and milk stirred more concerns about the long-term impact.
DEFENCELESS DOLLAR
The yen traded around 81.00 per dollar and it eased
against the euro to around 115.20.
Last week, expectations insurance firms and others would
repatriate yen to pay for quake reconstruction drove the
Japanese currency to a record 76.25 per dollar before the Group
of Seven rich nations stepped in on Friday.
The dollar on Tuesday skidded as investors embraced
leveraged risk trades in stocks and commodity-linked currencies
such as the Australian dollar .
The euro rose to highs not seen since November at $1.4240
, while the dollar index broke down through support
at 75.631, the low hit in the aftermath of the Federal Reserve's
second round of quantitative easing.
"Though much of the focus has been on JPY and the chances of
further coordinated intervention, the USD is barely able to
defend itself," said David Watt, a senior currency strategist at
RBC Capital Markets.
Benchmark 10-year Japanese government bond futures
fell 0.27 point to 139.47, while the 10-year yield
edged up 0.4 basis point to 1.245 percent.
"I expect the 10-year JGB yield will move around 1.2
percent. I was selling JGBs last week but I started to buy a
little bit this week," said a fund manager at a U.S. asset
management firm.
"The earthquake is going to have a big impact on the macro
economy. We are going to see soft economic data in coming
months. Reconstruction demand will not come until a few months
later and power shortage is likely to curtail growth."
U.S. crude oil futures rose 34 cents to $102.67 a
barrel and Brent crude rose 20 cents to $115.16. Gold
rose to around $1,430 an ounce.
(Additional reporting by Hideyuki Sano and Antoni Slodkowski in
Tokyo, Wayne Cole in Sydney and Victoria Thieberger in
Melbourne)
