* Yen up, but seen turning lower on domestic capital
outflow
* CRB commodity index set for biggest monthly rise since
1974
* Asia stocks little changed, oil off six-month high
* Asia ex-Japan stocks set for 3rd double digit monthly
gain
By Kevin Plumberg
HONG KONG, May 29 (Reuters) - The yen rose on Friday,
helped by the biggest monthly spike in Japanese industrial
output since 1953, while crude prices eased from a six-month
high but were still up around $3 this week on expectations of
increased demand.
Higher commodity prices this week supported mining and
energy-related stocks in Asia, though investors were reluctant
to take big bets on increasingly expensive shares until more
evidence emerged of a sustained recovery.
Big flows of capital out of Japan from retail investors
seeking higher returns overseas could still keep the yen under
pressure in the medium term, especially with data showing
unemployment rising to a 5-1/2-year high in April.
"The firmness in stocks has boosted Japanese retail
investors' risk appetite," said Tsutomu Soma, a senior manager
in the foreign securities department at Okasan Securities,
adding that household investors' money is also flowing out of
the country through pension funds.
"Profit-taking in overseas currencies may temporarily lift
the yen, but the downward trend in the yen is likely to stay
intact," Soma said.
The U.S. dollar was down 0.6 percent to 96.30 yen <JPY=>,
though was still up 2.3 percent in May, the biggest monthly
gain of the year, with Japanese investors finding value mostly
in foreign bond markets.
The yen got a boost after data showed Japanese industrial
production rose 5.2 percent in April on a monthly basis, and
the government expected continued gains through June.
[]
The euro fell 0.3 percent to 134.71 yen <EURJPY=> after
hitting a seven-week high overnight.
The Australian dollar advanced 0.4 percent to US$0.7883
<AUD=>, testing the seven-month high reached on Wednesday.
Higher commodity prices and evidence of an economic
strength in China have propelled the Australian currency,
making it a proxy for global growth prospects.
COMMODITY BULLS
The Reuters-Jefferies CRB index <.CRB>, a global
commodities benchmark, was up 12.3 percent in May, on its way
to the biggest monthly gain since July 1974.
"Gains in commodities reflect continued recovery of demand
outlook from its collapse after Lehman's bankruptcy triggered
concerns of a depression," said Dariusz Kowalczyk, chief
investment strategist with SJS Markets in Hong Kong.
"Medium-term outlook remains positive for commodities and
other risky asset classes as we continue to expect that U.S.
GDP will start to expand in Q3 and several major Asian
economies already in Q2," he said in a note.
Beside a 1 percent rise in Australia's benchmark S&P/ASX
200 equities index <>, Asia's stock markets were largely
unchanged.
Japan's Nikkei share average <> was trading flat on
the day, having punched above its 200-day moving average and
now girding up for a challenge of the previous high for the
year reached on May 11.
Hong Kong's Hang Seng index slipped 0.3 percent <>
after opening at an eight-month high.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 0.5 percent to its highest since Oct. 6,
on its way for a third consecutive month of double-digit
percentage gains.
Asia has continued to lead a global equity rally that began
on March 9. The MSCI index has surged 51 percent since March 9
while the all-country world index <.MIWD00000PUS> has climbed
30 percent.
U.S. oil prices slipped to $64.71 after climbing to $65.44
on Thursday, the highest since early November, after OPEC held
production at current levels.
The Organization of the Petroleum Exporting Countries kept
output targets unchanged on Thursday, as expected, betting on a
strengthening world economy and tentative signs of increased
demand to boost oil prices. []
(Additional reporting by Rika Otsuka in TOKYO)
