* Asia shares rise 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 a global economic recovery, while the yen
slid after Tokyo hinted currency intervention could be an
option in some cases.
European stock futures <STXEc1> were up 0.2 percent with
markets awaiting a flood of data including UK final Q2 GDP
<ECONG7>, while U.S. equity futures <SPc1> were flat.
Australian shares rose to nearly their highest level in a
year as M&A activity overseas on Monday, including Xerox Corp's
<XRX.N> biggest acquisition ever [], was seen
catching on globally.
"M&A activity is coming, we're told. It's difficult to pin
down but there's going to be more in the resources sector,"
said Bill Bishop, a private client adviser at RBS Morgan in
Australia.
In Japan, the yen's retreat from an eight-month high hit on
Monday helped shares of Japanese exporters, lifting the Nikkei
average <> by 0.9 percent.
Japan's currency <JPY=> came under pressure after Finance
Minister Hirohisa Fujii said that intervention might be an
option if currency moves were irregular, although he reiterated
it was wrong for any country to try to win a competitive edge
by devaluing its currency. []
The yen slid to as low as 90.23 to the dollar after his
comments, further pulling back from 88.22 hit on Monday, its
highest level since January. Tokyo has not intervened in the
market since March 2004 and analysts do not expect such a moven
anytime soon.
"Fujii appears to have been jolted by the yen's rapid
appreciation and is worried that the strong yen would throw
cold water on the economic recovery led by exports. But it is
unlikely the government actually will intervene in the market,"
said Takumi Tsunoda, an economist at Shinkin Central Bank
Research Institute in Tokyo.
A record drop in consumer prices last month highlighted
that Japanese domestic demand is still weak and limited losses
in Japanese government bond futures, which dipped as stocks
gained.
December 10-year JGB futures <2JGBv1> were down 0.02 point
at 139.29.
AUSSIE DOLLAR SHINES
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> rallied 2 percent, and is now up 60 percent
this year, while the Thomson Reuters index for regional shares
<.TRXFLDAXPU> was 2.4 percent higher.
Technology shares 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 Semiconductor Manufacturing Co Ltd <2330.TW> and UMC
<2303.TW>, the world's two largest contract chip makers,
rallied 4.9 percent. and 3.6 percent respectively.
China shares bucked the rise in regional stocks, dropping
nearly 2 percent as investors were cautious about new listings
and ahead of an eight-day national holiday starting Oct. 1.
"Investors are worried that new share supply ... will
continue diverting funds from existing shares," said Gui
Haoming, head of research at Shenyin and Wanguo Securities.
The Australian dollar <AUD=> got a lift after a senior
central banker warned of a potential housing bubble, adding to
expectations of an interest rate rise soon. A central bank
watcher 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. []
The Australian dollar was trading at $0.8742, not far off
its 13-month high of $0.8790 set last week.
Robust equity markets and geopolitical tensions sparked by
Iranian missile tests this week pushed oil prices <CLc1> up to
above $67 a barrel at one point, extending a more than 1
percent gain on Monday.
Gold <XAU=> edged up to $992.20 an ounce but traders said
investors were cautious, saying bullion may be due a slight
correction.
(Additional reporting by Victoria Thieberger in Melbourne,
Leika Kihara in Tokyo and Lu Jianxin in Shanghai; Editing by
Kim Coghill)
