* Asia stocks at 2-mth high on US stimulus spending hopes
* Aussie hits 3-mth high vs US dlr as high-yielders gain
* Oil jumps on Mideast violence, supply cuts
* JGBs and Treasuries fall on stock rebound
(Repeats to more subscribers)
By Eric Burroughs
HONG KONG, Jan 5 (Reuters) - Asian stocks hit a two-month
high on Monday, with investors betting the global economy will
start to recover later this year by shedding some of their big
holdings of safe-haven government bonds.
The Australian dollar pushed to a three-month high against
the U.S. dollar as investors embraced higher-yielding
currencies, taking heart from calmer financial markets and
expectations for big government stimulus spending packages in
coming weeks to revive growth.
Many market players are looking for a large U.S. spending
package and tax cuts to help support the world's largest
economy. U.S. President-elect Barack Obama will meet later on
Monday with senior Congressional leaders to discuss the plan.
[]
"Risk aversion has eased in the last week and this has sent
both the Dow and the Nikkei higher," said Nagayuki Yamagishi, a
strategist at Mitsubishi UFJ Securities in Tokyo.
"There's quite a lot of expectations for the government of
Obama and the policies he's likely to enact, but when he
actually takes office this mood may evaporate and a lot of
problems still linger."
Analysts believe the record drops that many stock markets
suffered in 2008 have already gone a long way in anticipating
the global economy's slide into recession and the hit to
corporate earnings that will be reported in coming months.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> rose more than 1 percent to a two-month peak,
taking gains on the first two trading days of 2009 to nearly 3
percent after a record 53 percent plunge last year.
Japan's Nikkei average <> gained 2.1 percent to reach
a two-month high in a half-day of trading, the first as markets
re-opened after a string of New Year's holidays.
A retreat in the yen helped lift exporters like Honda Motor
Co <7267.T>, while a jump in commodity prices boosted shares of
energy-related companies and trading houses. Mitsubishi Corp
<8058.T> surged more than 9 percent.
Oil prices climbed 91 cents a barrel to $47.25 <CLc1> as
OPEC product cuts took effect and an Iranian military commander
reportedly called for an oil boycott over Israel's ground
offensive in the Gaza Strip to counter militant rocket attacks.
Russia's move to cut natural gas supplies to the Ukraine
also showed signs of affecting Central European countries.
The dollar edged up across the board, mainly getting a
boost as the euro stumbled. Traders said the single currency's
surge in December was due more to factors such as investors
repatriating funds before year-end and was likely overdone.
The euro dropped 0.3 percent to $1.3860 <EUR=>. The dollar
index, a gauge of its performance against six major currencies,
was up 0.4 percent at 81.799 <.DXY> and near a three-week high.
The Australian dollar climbed to its highest in almost
three months at about $0.7160 <AUD=>.
Both low-risk Japanese government bonds and U.S. Treasuries
took a hit on the rebound in stocks.
The benchmark 10-year JGB yield <JP10YTN=JBTC> rose 3 basis
points to 1.195 percent, up from a five-year low hit last week.
Ten-year Treasury notes <US10YT=RR> dropped 13/32 in price to
yield 2.407 percent, up nearly 40 basis points after touching
their lowest levels since the 1950s in December.
"It's still too early to say whether bond yields are
reversing their recent downward trend," said Chotaro Morita,
chief fixed-income strategist for Japan at Barclays Capital.
"But market players are certainly watching out for possible
fiscal stimulus steps from governments around the world, and
JGBs are likely to be hit if hopes for government measures
spark more stock buying.
(Additional reporting by Elaine Lies and Rika Otsuka in
Tokyo; Editing by Dhara Ranasinghe)
