* Oil trades below $124 as U.S. demand seen deteriorating
* ANZ Bank stock plummets after $1.1 bln write down
* Equity capital returns to Asia-Pacific in week - EPFR
By Kevin Plumberg
HONG KONG, July 28 (Reuters) - The U.S. dollar rose to a
1-month high against the yen on Monday on easing fears about
the world's largest economy, and Asian stocks were mixed as
financial sector uncertainty lingered ahead of a slew of
company earnings.
Oil prices below $124 a barrel provided some comfort on
global economic growth prospects, but a profit warning from
Australia's third-biggest bank, which forecast more than $1
billion in write-downs, cast a pall on the region.
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Japan's Nikkei share average <> rose 0.5 percent after
U.S. economic data spurred hopes for the country's enfeebled
export sector.
However, Honda Motor Co shares <7267.T> fell 3.2 percent
and slowed the index's advance after the auto maker cut its
annual earnings outlook on Friday, leaving investors uneasy
ahead of results this week from Sony Corp <6758.T>, Nintendo Co
Ltd <7974.OS>, Sumitomo Mitsui Financial Group <8316.T> and
Mizuho Financial Group <8411.T>.
"Solid moves in U.S. stocks and a softer yen are supporting
the market, but investors are finding it difficult to buy due
to a large amount of uncertainty," said Yutaka Miura, deputy
manager of the equity information department at Shinko
Securities in Tokyo.
Outside Japan, shares in Asia-Pacific were down 0.5
percent, according to an MSCI index <.MIAPJ0000PUS>.
Australia's benchmark S&P/ASX 200 index <> slid 1.3
percent, led by Australia and New Zealand Banking Group
<ANZ.AX>, whose shares slumped as much as 13 percent after it
said its earnings per share would likely fall as much as 25
percent because of costs associated with bad loans.
Hong Kong's Hang Seng <> was largely unchanged, with
gains in Sinopec Corp <0386.HK> tempered by a decline in HSBC
<0005.HK>. Taiwan's markets were closed due to a typhoon.
The U.S. dollar extended a small rally from last week and
climbed to the highest against the yen in a month, above 108
yen <JPY=>. It was bolstered by data showing U.S. consumer
sentiment bounced from a 28-year low, a surprise rise in
business investment and new home sales that were not as weak as
expected.
The euro was relatively steady at $1.5690 <EUR=>.
After last week, when oil prices logged the largest decline
since December 2004, investors pulled money out of defensive
choices and took a chance on some beat-down areas.
"With oil prices dropping towards $130 a barrel and the US
dollar showing signs of recovery, investors recovered a little
of their risk appetite during the third week of July,"
according to EPFR Global, a Boston-based research firm.
For example, Asia ex-Japan equity funds had the first week
of positive flows since mid-May and for global emerging market
funds in more than seven months, said EPFR, which tracks $10
trillion in assets.
In terms of global sectors, investors sold the commodity,
financial, real estate and consumer goods sectors and put money
into the healthcare/biotechnology, energy and technology
sectors.
Japanese government bonds fell as the Nikkei rose,
following a drop in U.S. Treasuries late last week after
better-than-expected data eased worries about U.S. growth
prospects.
While the Bank of Japan has said it is more concerned about
the downside risks to growth, analysts believe core consumer
prices running at a decade-high annual rate of 1.9 percent in
June left little scope for an interest rate cut.
"The JGB market is reacting to the rise in Tokyo shares and
weak U.S. Treasuries, but players are largely absent, keeping
trading in a range," said Naomi Hasegawa, senior JGB strategist
at Mitsubishi UFJ Securities.
The benchmark 10-year yield <JP10YTN=JBTC>, which moves
inversely to the price, rose 2 basis points to 1.595 percent
while the 5-year yield <JP5YTN=JBTC> rose 2.5 basis points to
1.165 percent.
