* Asian shares see modest gains, led by Korea; Japan closed
* Dollar runs out of steam, mkts await Fed meeting
* NZ dollar surges to 13-mth high on rising dairy prices
By Susan Fenton
HONG KONG, Sept 22 (Reuters) - Asian shares edged higher on
Tuesday, helped by gains in South Korean technology shares,
while the New Zealand dollar surged to a 13-month high on signs
of a recovery in prices for the country's key dairy exports.
European stock futures <STXEc1> were up 0.5 percent while
U.S. equity futures <SPc1> were 0.2 percent higher.
The U.S. dollar ran out of steam, pulling back to around
91.70 yen <JPY=> after reaching 92.53 yen on Monday. However,
analysts do not expect the U.S. currency to slip much ahead of
a U.S. Federal Reserve monetary meeting on Tuesday and
Wednesday, and a G20 summit this week.
"Persistent consolidation seems to have set in ahead of the
G20 meeting," said Clifford Bennett, chief economist at Kinetic
Securities in Australia. "Especially in the currency market
there is increasing fear of some 'strong dollar' statements
and/or political rhetoric about the euro being too strong."
Volumes were capped as Japanese financial markets are
closed until Thursday for public holidays. Malaysian and
Indonesian markets were also closed for public holidays.
In Australia, shares were little changed, dampened by an
overnight drop in commodities prices although gold <XAU=>
bounced back as the dollar retreated and oil <Clc1> recovered
to $70 a barrel.
South Korean shares climbed 1.4 percent, helped by gains in
tech stocks after Merrill Lynch upgraded Hynix Semiconductor
<000660.KS>, the world's No. 2 memory chip maker.
Shares in Hynix gained 2.8 percent and Samsung Electronics
<005930.KS>, the world's biggest maker of memory chips, jumped
3.4 percent although the company said it was cautious on the
outlook for the sector.
Treasury bond futures <KTBc1> fell after the Bank of Korea
said it was ready to use monetary policy to help calm rising
property prices. []
FED WATCH
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> edged up 0.7 percent and has nearly doubled
since early March when markets began pricing in an economic
upturn.
In the past two months, a slowing equity rally together
with abundant liquidity and easing inflation means equity and
bond markets have both gained ground. But Adrian Foster, head
of Asia-Pacific financial markets at Rabobank, says both
markets could retreat in the next few months.
"We think equities have priced in a reasonable economic
recovery," Foster said. "Over the next few months, bonds could
back off a bit on improving economic data and we'll see higher
yields."
The Asian Development Bank raised its growth forecasts for
'developing Asia' to 3.9 percent for 2009, from 3.4 percent,
and lifted its 2010 forecast to 6.4 percent from 6 percent.
Financial markets will be watching the U.S. Federal
Reserve's two-day monetary policy meeting for any comments
indicating the Fed might wind back its super-accommodative
policy stance given improving U.S. economic data. That would be
a boost for the dollar if it does, analysts said.
The New Zealand dollar <NZD=D4> surged to a 13-month high
above $0.7159, after the country's Fonterra group, the world's
largest dairy exporter, raised its estimated payout to farmer
shareholders for the 2009/10 season by 12 percent, citing signs
of a recovery in dairy prices. []
Fonterra generates about 7 percent of New Zealand gross
domestic product.
The kiwi, which has rallied more than 40 percent from a
six-year low plumbed in early March, was also supported by
current account data that showed New Zealand's second quarter
deficit at its lowest level in nearly five years.
[]
Commodities prices steadied after the Reuters-Jefferies CRB
index of commodities <.CRB> tumbled 2.2 percent in New York
trade, its largest percentage drop in five weeks.
China is expected to remain a fervent buyer. Its sovereign
wealth fund China Investment Corp has bought a 14.5 percent
stake in Singapore-listed global commodities trader Noble Group
<NOBG.SI>, according to sources, giving China greater exposure
to global commodities and trading expertise. []
Shares in Noble, which has interests from Brazilian sugar
to Australian coal, remained suspended.
China shares were weak with the Shanghai share index
<> dropping 1.6 percent as fears persisted that upcoming
IPOs will create excess supply of shares.
(Additional reporting by Anirban Nag in Sydney; Editing by
Jeremy Laurence)
