* Japan's Nikkei share average rises more than 4 pct
* Losses now limited to just over 6 pct since March 11 quake
* Yen edges up but traders on alert for G7 intervention
* Oil prices steady, gold up; markets watching Middle East
* European shares called to open lower
By Alex Richardson
SINGAPORE, March 22 (Reuters) - Japanese stocks jumped more
than 4 percent on Tuesday amid reports of progress in
stabilising an earthquake-damaged nuclear plant and the yen
edged up, putting traders on heightened alert for more central
bank intervention.
Oil prices were steady, following a 1 percent rise in the
previous session as widening unrest in the Middle East fed fears
of supply disruptions.
Gold edged higher supported by a weak dollar and violence in
the Middle East that boosted its safe-haven appeal.
Asian shares outside of Japan posted modest gains to recoup
all of last week's losses, building on gains on Monday when
Tokyo markets were closed for a holiday.
A firm close for U.S. stocks after AT&T's move to buy
Deutsche Telecom offered Asia support.
"Shares are bouncing with the Japan nuclear fear abating as
the latest news reports point to steady progress on repairs at
the nuclear plant site," said Kwak Joong-bo, a market analyst at
Samsung Securities in Seoul.
However, European shares were seen opening lower in payback
for three sessions of gains and S&P 500 futures were down
0.1 percent, pointing to a subdued Wall Street later.
Tokyo's Nikkei share average rose 4.4 percent to
close near its intraday high.
Nikkei futures traded in Osaka rose a similar amount
and Chicago-traded Nikkei futures gained 3.2 percent.
"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, lower
than 2.2 for the U.S. benchmark S&P 500, Thomson Reuters
Starmine data shows.
The Nikkei is down 6.3 percent from its close on March 11,
the day northeastern Japan was struck by a 9.0 magnitude
earthquake and a 10-metre tsunami. The disaster has 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.
MSCI's index of Asia-Pacific shares outside Japan
rose 0.6 percent, bolstered by a rise in the Dow
Jones industrial average and broader S&P 500 of
1.5 percent.
Asian shares outside Japan have now recovered all the ground
they lost after the earthquake.
DEFENCELESS DOLLAR
The yen traded up about 0.1 percent around 80.90 per
dollar and edged up against the euro to around
115.10.
Last week, expectations the cost of quake reconstruction
would prompt insurance firms and others in Japan -- a big net
creditor to the rest of the world -- to repatriate yen drove the
Japanese currency to a record 76.25 per dollar before the Group
of Seven rich nations stepped in on Friday.
Leading central banks spent more than $30 billion to drive
the yen back above 80 to the dollar, the first such coordinated
intervention since 2000. Traders said the Bank of Japan might
intervene again if the dollar falls closer to 80 yen.
The dollar on Tuesday skidded as investors embraced
leveraged risk trades in stocks and commodity-linked currencies
such as the Australian dollar .
Expectations the Federal Reserve will maintain its
super-loose monetary policy for some time to come have made it
safe to borrow dollars to fund investments in higher-yielding
currencies and assets -- the so-called carry trade -- traders
said.
European Central Bank policymakers, in contrast, have been
warning they are ready to raise interest rates despite
uncertainty about the strength of the economy, helping to push
the single currency to a four-month high.
The euro rose to highs not seen since November at $1.4240
and was later trading around $1.4225, 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 0.34 point to 139.40, 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 were little changed at $102.34
a barrel and Brent crude also barely budged to trade at
$114.93. Gold edged up to around $1,428.75 an ounce.
Anti-aircraft fire rang out across Tripoli for a third night
on Monday, but air attacks on Libya are likely to slow, a U.S.
general said, as Washington holds back from being sucked into
the Libyan civil war.
"It now seems likely that there will be a significant loss
of Libyan oil supplies for some time," said Ric Spooner, chief
market analyst at CMC Markets.
"This will reduce the buffer of excess capacity and increase
the oil market's vulnerability to any new supply shocks which
may emerge."
(Additional reporting by Hideyuki Sano and Antoni Slodkowski in
Tokyo, Wayne Cole in Sydney, Victoria Thieberger in Melbourne,
Jungyoun Park in Seoul and Masayuki Kitano in Singapore; Editing
by Neil Fullick)
(To read Reuters blogs, click on:
-- Global Investing: http://blogs.reuters.com/globalinvesting;
-- MacroScope: http://blogs.reuters.com/macroscope;
-- Hedge Funds: http://blogs.reuters.com/hedgehub)
