* MSCI Asia-Pacific ex-Japan index falls for 4th day
* Need for safety drives up yen, U.S. dollar, U.S.
Treasuries
* High-yield bonds in heavy demand on hunger for
yield-EPFR
(Repeats to additional subscribers with no change to text)
By Kevin Plumberg
HONG KONG, Jan 12 (Reuters) - Asian stocks fell for a
fourth straight session on Monday as the relentless global
economic slowdown limited investor enthusiasm about
risk-taking, though returns offered on some bonds were proving
too good to pass up.
European stock market futures pointed to a lower open
<STXEc1>, as economic gloom spread.
Friday's December U.S. payrolls report, which showed more
than half a million jobs lost and the highest unemployment rate
since 1993, aggravated anxiety that consumer demand for Asian
exports is nowhere near recovering, keeping oil prices near $40
a barrel. []
"The negativity still sits in the market, nothing's really
changed in 2009," said Dominic Vaughan, senior dealer at CMC
Markets in Australia. "In the next three to six months we've
still got difficult times ahead for commodity markets and
global markets as well," he said.
The MSCI index of stocks in Asia-Pacific outside Japan
<.MIAPJ0000PUS> fell 2.7 percent, down for a fourth day after a
rally that lifted the gauge to a one-month high fizzled last
week.
Japan's markets were closed for a public holiday.
Australia's benchmark S&P/ASX 200 index <> fell 1.4
percent and the country's currency fell to a two-week low after
a private sector survey showed a sharp drop in job
advertisements, suggesting Thursday's official employment data
could reflect weakness.
Hong Kong's Hang Seng index <> declined 2.9 percent for
a fifth straight falling session, matching a losing streak in
October. Commodity-related stocks were under pressure, and
airline shares slid after China Eastern Airlines <0670.HK> said
it would report a large 2008 loss partly because of bad hedges
on fuel price contracts.
The euro was under broad pressure ahead of a European
Central Bank policy meeting on Thursday, at which policymakers
are expected to cut rates by a half-percentage point to 2
percent.
WANTED: YIELD
A collapse in European manufacturing as well as the
increased risk of sovereign debt rating downgrades in Europe
put pressure on the ECB to cut rates and catch up with other
big central banks. The Bank of England has cut borrowing costs
to a record low and the Federal Reserve has set rates within a
range of zero to 0.25 percent.
The euro fell 0.4 percent against the U.S. dollar to
$1.3424 <EUR=>. Against the yen, the euro was down 0.4 percent
to 120.99 <EURJPY=R> after an aggressive selloff on Friday.
The U.S. dollar was trading largely unchanged at 90.15 yen
<JPY=>, as the need for safety increased demand for both
currencies.
Aluminium producer Alcoa <AA.N> will report its results
later on Monday, kicking off the earnings season. Investors
will be wary of any reason for analysts to cut their U.S.
earnings expectations, which could kill off the past month's
rally into stocks, commodities and emerging market currencies.
Last week, capital slowly flowed back into riskier assets,
though investor caution after such a devastating 2008 also kept
money market funds absorbing fresh investment.
Even non-investment grade bonds saw heavy demand last week
as hunger for yield and bargain hunting drove portfolio
managers out from the sidelines. High yield bond funds took in
$910.9 million in new investment, the highest weekly inflow
since Boston-based research firm EPFR Global began tracking the
data four years ago.
"The winning run by High Yield Bond Funds has been driven
by a combination of gradually rising risk appetite, a hunger
for yield, short covering and the quality of some debt that has
dropped into the high yield/junk pool in recent months," said
Brad Durham, EPFR Global managing director in a note.
In Asia, the cost of insuring investment-grade debt against
default and restructuring eased a bit but investors were not
yet ready to jump head-first back into risk. []
The yield on the benchmark 10-year U.S. Treasury note
<US10YT=RR> was up a touch to 2.41 percent from 2.39 percent
late on Friday in New York, when the U.S. payrolls report
caused a rush to safety.
The jobs data also hit a nerve in commodity markets.
U.S. light crude for February delivery <CLc1> fell 2.5
percent to $39.80 a barrel, flirting with a sustained drop
below the psychologically important $40 level.
News that OPEC kingpin Saudi Arabia plans to cut oil output
to below its agreed target for the cartel, ongoing supply
disruptions in Europe from the Russia-Ukraine gas dispute and
tensions in the Middle East did little to sway the market from
a focus on dwindling world-wide energy demand.
(Additional reporting by Sonali Paul in MELBOURNE; Editing by
Jan Dahinten)
