* Asia stocks up 1.4 percent on encouraging China, U.S.
data
* Banks gain, Basel III gives them more time to raise
capital
* Basel III "removes uncertainty" from the market--analysts
* Euro surges nearly 1 pct, low-yielding yen retreats
By Nick Macfie
SINGAPORE, Sept 13 (Reuters) - Asian shares rose on Monday
on encouraging economic data out of China and the United
States, and as a deal on global bank rules gave lenders some
respite before having to raise hundreds of bilions of dollars
in fresh capital.
Japan's benchmark Nikkei average <> rose 1.4 percent,
while the MSCI index of Asian shares outside Japan
<.MIAPJ0000PUS> was up 1.6 percent as the data encouraged
investors to return to riskier assets.
Chinese factories increased production in August and money
growth easily topped analysts' expectations, according to data
on Saturday, showing that the economy remained buoyant despite
government efforts to clamp down on bank lending and property
speculation.
Inflation in China sped to its fastest pace in 22 months,
though the bulk of price rises stemmed from higher food costs,
which analysts have said should be transitory after a spell of
bad weather this summer. []
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The yen: Eye on intervention : http://r.reuters.com/mam52p
For a full package of stories on the Basel III reforms,
click []
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Data on Friday showed U.S. wholesale inventories surged the
most in two years in July, adding to signs that economic growth
in the third quarter of the year may prove a bit stronger than
many forecasters had expected. The U.S. trade gap also narrowed
sharply in July. []
The reports pushed up major stock indexes on Wall Street by
as much as 0.5 percent. []
While the U.S. economy still seems mired in a slow-growth
path, recent data have helped dispel some fears that it might
be sliding back into recession.
BASEL BUOYS BANK STOCKS
Global bank regulators, aiming to prevent any repeat of the
international credit crisis, agreed in Basel, Switzerland, on
Sunday to force banks to more than triple the amount of
top-quality capital they must hold in reserve. []
But to ease the burden, regulators gave the banks
transition periods to comply. These periods, extending in some
cases to January 2019 or later, are longer than many analysts
had expected.
Global bank and top European lender HSBC <0005.HK><HSBA.L>
was up more than 2 percent, with some of Japan's leading banks
seeing similar gains.
"It's a mixed blessing for the banks, but I'm sure
investors will be happy to get some clarity and allow the
market to move on," said Robbert Van Batenburg, head of equity
research at Louis Capital Markets in New York, said of the new
rules, known as Basel III.
"... The best thing is it removes the uncertainty that was
hanging over the market... The markets should take this
favourably."
The U.S. Federal Reserve System's Board of Governors said
the decision should help minimise future financial meltdowns.
"The agreement represents a significant step forward in
reducing the incidence and severity of future financial crises,
providing for a more stable banking system that is less prone
to excessive risk-taking, and better able to absorb losses
while continuing to perform its essential function of providing
credit to creditworthy households and businesses."
EURO SURGES
The euro <EUR=> surged following the Basel agreement and
the upbeat Chinese data, which also propelled the Australian
dollar <AUD=> to its highest in four months against the dollar.
Automatic buy orders triggered at around $1.2720/30 and
$1.2750/70 helped extend the euro's rally to nearly 1 percent,
but it later faltered at $1.2800 <EUR=>.
The euro has been in a downtrend against the dollar all
year on concerns about sovereign debt and the European banking
system.
"The introduction of the new Basel rules will be years
away, so the market's focus will soon shift back to more
immediate factors, such as euro zone debt auctions and
suspicions on the EU stress test," said Keiji Matsumoto,
strategist at Nikko Cordial Securities in Tokyo.
The low-yielding yen faltered as investors moved into
riskier assets offering the prospect of stronger returns.
The dollar traded at 84.12 yen <JPY=>, after hitting a
15-year low of 83.34 yen last week. The euro rose to $1.2786
<EUR=>, and gained to 107.55 yen <EURJPY=R>.
Gold, a traditional safe haven amid bad economic news, was
slightly higher. Spot gold <XAU=> was hovering around $1,246 an
ounce at 0345 GMT.
Oil reached a one-month high, partly as the Chinese data
signalled continued strong demand from emerging economies. U.S.
crude futures for October <CLc1> climbed 1 percent to $77.20 a
barrel.
(Additional reporting by Charlotte Cooper; Editing by Kim
Coghill)
