* Asia shares rally as overseas M&A activity boosts
sentiment
* Yen slips after Fin Min Fujii says intervention possible
* Aussie dollar gains on renewed rate rise speculation
By Susan Fenton
HONG KONG, Sept 29 (Reuters) - Asian shares rose on
Tuesday, as news of several multi-billion dollar takeover bids
overseas boosted confidence in global economic recovery, while
the yen dipped after Tokyo refused to rule out currency
intervention.
The yen's retreat from an eight-month high hit on Monday
helped Japanese exporters such as Honda Motor <7267.T>, lifting
the Nikkei average <> by 1 percent.
The yen <JPY=> slid after Finance Minister Hirohisa Fujii
said that intervention might be an option if currency moves
were irregular, even though he reiterated it was wrong for any
country to try to win a competitive edge by devaluing its
currency. []
"If moves are irregular, there is a possibility we might
take whatever action deemed necessary for the sake of the
country," Fujii told a news conference.
The yen dipped to 90.04 to the dollar after the comments,
further pulling back from 88.22 hit on Monday, its highest
level since January.
Japanese government bond futures dipped as stocks gained
but losses were limited by news that Japanese deflation
deepened last month, with consumer prices falling by a record
2.4 percent from a year earlier, further highlighting weak
domestic demand.
December 10-year JGB futures <2JGBv1> were down 0.02 point
at 139.29.
TAIWAN TECH SHARES SURGE
Shares across Asia climbed with the MSCI index of Asia
Pacific stocks traded outside Japan <.MIAPJ0000PUS> up 1.9
percent, following Wall Street's <.DJIA> 1.3 percent gain
overnight.
U.S. stocks snapped a three-day losing streak, buoyed by
news of increased merger and acquisition activity that
suggested companies were optimistic about the economic
outlook.[]
Abbott Laboratories <ABT.N> said it would buy the drugs
unit of Solvay <SOLB.BR> in a 4.5 billion euros ($6.6 billion)
deal, and Xerox Corp <XRX.N>, in its biggest acquisition ever,
plans to buy Affiliated Computer Services Inc <ACS.N> for $6.4
billion in cash and stock. [] []
Technology shares in Asia drew buying, notably in Taiwan
where they traded on news that Taipei will allow contract
chipmakers and flat-panel makers to acquire rivals in China,
although analysts said it would be some time before the policy
was implemented.
Taiwan's main share index <> rose nearly 2 percent as
Taiwan Semiconductor Manufacturing Co Ltd <2330.TW> and UMC
<2303.TW>, the world's two largest contract chip makers,
rallied more than 4 percent.
The Australian dollar <AUD=> got a lift after local central
bank watcher Terry McCrann said the Reserve Bank of Australia
was almost certain to raise interest rates by 25 basis points
each in November and December although he did not cite any
sources.
That would make Australia one of the first major economies
to raise rates since the global financial crisis and would make
its high-yielding currency even more attractive for investors
seeking better returns as the global economy picks up.
The Australian dollar was trading at $0.8746, not far off
its 13-month high of $0.8790 set last week.
The oil price <CLc1> continued to edge higher, topping $67
a barrel at one point, after rising more than 1 percent on
Monday, following Wall Street's jump and tensions sparked by
Iran's testing of missiles.
Gold <XAU=> hovered at around $990 an ounce but was
overshadowed as attention was diverted to currency markets,
analysts said.
(Additional reporting by Leika Kihara in Tokyo; editing by
Tomasz Janowski)
