* European stocks down 0.7 percent, Japan off 1.3 percent
* Emerging markets stocks continue gains
* Yen rises against dollar, euro
* U.S. bailouts in focus
By Jeremy Gaunt, European Investment Correspondent
LONDON, Feb 9 (Reuters) - Equities were weaker in Europe and
Japan on Monday but emerging markets were putting in a fifth
consecutive day of gains, reflecting what some analysts see as a
gradual return of investor risk appetite.
The dollar was stronger against a basket of major currencies
but the Japanese yen gained.
Caution remained over the contents of both the U.S. stimulus
package and a delayed plan to rescue the U.S. banking system.
"This is the world's biggest casino throw we've ever seen,"
Justin Urquhart Stewart, director at Seven Investment
Management, said of the U.S. economic package. "There is no
certainty in this market."
Squabbling over the U.S. rescue plan was set to continue
later in the day, when the Democratic-led Senate votes to end
debate on an $827 billion rescue package so it can be passed on
Tuesday.
World stocks as measured by MSCI <.MIWD00000PUS> were down
slightly, weakened by trading in Europe, where the FTSEurofirst
300 <> was down 0.7 percent, and in Japan, where the
Nikkei <> closed down 1.33 percent.
But MSCI's benchmark emerging market index <.MSCIEF> was up
0.4 percent. The index is down just 1.3 percent in 2009, easily
outperforming the 5.4 percent loss on the equivalent developed
market gauge <.MIWO00000PUS>.
Researchers EPFR Global reported that the global emerging,
Asia ex-Japan and Latin America equity funds that it tracks all
posted net inflows in its latest weekly snapshot.
Barclays Capital, in the meantime, said currency performance
indexes it has constructed are showing a move by market players
away from strong risk aversion.
"Though there has been no sign that risk appetite is
strongly positive, the backing away from the mood of intense
risk aversion is significant," it said in a note.
U.S. PACKAGE WEIGHTS
Nonetheless, Monday's mood on currency markets was generally
cautious.
The yen rose broadly, buoyed by disappointment at a delay in
the announcement of the U.S. bank bailout plan until Tuesday.
"The yen's gains really reflect investor disappointment that
the U.S. bank rescue plan was postponed," BTM-UFJ currency
economist Lee Hardman said.
"Given the scale of the problem it is clear that we need to
see an effective solution as quickly as possible, and the delay
has dented confidence in the authorities' ability to get ahead
of the curve in resolving it," he said.
The dollar fell 0.6 percent against the yen <JPY=> to 91.37
yen, while the euro lost 0.9 percent to 117.87 yen <EURJPY=>.
The euro fell 0.3 percent against the dollar to $1.2897
<EUR=>, with the U.S. currency up against a basket of major
currencies <.DXY>.
On euro zone government bonds markets, the two-year yield
<EU2YT=RR> was flat at 1.408 percent, while the 10-year yield
<EU10YT=RR> was steady at 3.362 percent.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
(Additional reporting by Jessica Mortimer, Rebekah Curtis and
Elaine Lies, editing by Mike Peacock)
