* Stocks rebound from lows, helped by earnings
* Yen slips further, authorities eyed
By Jeremy Gaunt, European Investment Correspondent
LONDON, Aug 26 (Reuters) - World stocks bounced off
seven-week lows and Japan's yen weakened on Thursday in another
burst of the risk-on, risk-off trading that has dominated
financial markets this year.
MSCI's main gauge of global equities <.MIWD00000PUS> was up
0.6 percent after hitting its lowest level since July 7 on
Wednesday. The Thomson Reuters global stock index <.TRXFLDGLPU>
was half a percent higher.
The global picture was helped along by strong corporate
earnings in Europe, which boosted the FTSEurofirst 300 <>
nearly 0.9 percent.
Both Credit Agricole <CAGR.PA> and L'Oreal <OREP.PA> beat
expectations.
"Companies have been reporting reasonable results," said
David Buik, partner at BGC Partners. "But whether a rally can be
sustained is to be seen, there is nothing to say the bad news is
all over."
Throughout the northern hemisphere summer, markets have been
balancing good corporate results with signs that growth in the
world-leading U.S. economy is falling back.
But the performance of assets is also highly correlated,
meaning that when investors move out of a riskier asset there is
a boost to safer ones, and vice versa.
That could be seen on euro zone government debt markets on
Thursday, where yields rose as investors moved out of bonds in
conjunction with the rise in stocks.
Longer-dated German bond yields hit record lows on Wednesday
after data showed new U.S. single-family home sales slid to the
slowest pace on record in July and orders for costly durable
goods were weak.
YEN EASES
One of the biggest risk-off trades, meanwhile, has been
buying Japanese yen. It hit a 15-year high against the dollar
<JPY=> earlier this week.
On Thursday, the yen slipped further from its high as
investors waited to see if Japanese authorities would go beyond
just trying to talk down the currency. []
"Investors are cautiously watching whether Japanese
authorities will do something," said Hideki Amikura, deputy
general manager of the forex section at Nomura Trust and Banking
in Tokyo.
News that Bank of Japan Governor Masaaki Shirakawa will
attend the Kansas City Federal Reserve conference in Jackson
Hole, Wyoming, this week made some players hesitant to push the
yen higher. []
The dollar was under pressure following the poor U.S. data.
The dollar index, a gauge of the greenback's performance
against a basket of six major currencies, fell 0.4 percent to
82.88 <.DXY>. It hit 83.556 on Tuesday, a six-week high.
The euro <EUR=> rose around 0.6 percent on the day to a
session high of $1.2746.
(Additional reporting by Naomi Tajitsu and Joanne Frearson)
