By Jacqueline Wong
SINGAPORE, April 18 (Reuters) - The dollar steadied against
the yen and euro on Friday, helped by growing confidence about
the outlook for the troubled U.S. financial sector, while Asian
shares eased ahead of quarterly earnings due from Citigroup
<C.N>, the biggest U.S. bank.
Worries over the fallout from the U.S. mortgage crisis
ebbed after Merrill Lynch & Co's <MER.N> shares rose 4 percent
on hopes the world's largest brokerage was closer to seeing
improvement from massive subprime-related write-downs.
China's main stock market <>, however, tumbled more
than 4 percent as PetroChina <601857.SS>, the biggest component
of the index, slid below its IPO price for the first time in
Shanghai.
Commodities remained in focus amid global shortages, with
rice prices gaining almost 4 percent to a new record, while
gold <XAU=> and oil <CLc1> also climbed.
The dollar had gained on Thursday partly due to relief that
U.S. corporate earnings were generally within expectations and
that recent sharp gains in the euro were seen as undesirable.
"Market players are becoming more bullish on both the
dollar and higher-yielding currencies versus the yen," said a
senior trader for a major Japanese trading house, adding: "It's
a reflection of the optimism that is taking hold in financial
markets overall."
The dollar steadied from late U.S. trade at 102.40 yen
<JPY=>, near a one-month high of 102.95 yen hit in early April.
The single European currency dipped 0.1 percent to $1.5899
<EUR=>, having retreated from a record $1.5985 hit on
electronic trading platform EBS on Thursday.
The euro had soared to just shy of $1.60 before retreating
when Jean-Claude Juncker, Luxembourg's prime minister and
chairman of monthly meetings between euro zone finance
ministers and the European Central Bank, complained about the
currency's strength against the dollar.
SHARES EYE CITIGROUP
Japan's Nikkei average slipped 0.2 percent after a
three-day winning streak and as investors stayed on the
sidelines ahead of Citi's results.
Asian shares earlier found support after Merrill reported
writedowns of $6.5 billion, in line with analysts'
expectations.
By 0255 GMT, the MSCI's measure of other Asia Pacific
stocks outside Japan <.MIAPJ0000PUS> fell 0.7 percent, bringing
year-to-date losses to more than 10 percent.
Exporters such as Canon Inc <7751.T> rose on a softer yen
and receding pessimism about U.S. corporate profits, but
investors kept to the sidelines ahead of Citi's results later
on Friday.
Analysts on average expect Citi to post a quarterly loss
close to $5 billion.
"Investors in Tokyo actually don't want the market to gain
too much today, though, because after Citi's earnings, the
market could enter a short-cover rally. Market sentiment has
become rather optimistic," said Mitsushige Akino, chief fund
manager at Ichiyoshi Investment Management Co Ltd.
Markets in Seoul <>, Taiwan <> and Singapore
<.FTSTI> posted losses of up to 0.5 percent.
Australian shares <> fell nearly 2 percent, dragged
down by Brambles Ltd <BXB.AX>, the world's top pallet supplier,
falling on worries of a possible loss of business from top
retailer Wal-Mart Stores Inc <WMT.N>.
U.S. May crude oil futures traded up 24 cents at $115.11 a
barrel, just shy of its record high as investors fretted over
gasoline supplies ahead of the U.S. summer driving season.
Gold recouped some of the previous day's losses attributed
to profit-taking after the metal's rise to a three-week high
above $950. Spot gold <XAU=> was at around $943 per ounce,
compared with late New York levels of $939.
Elsewhere, rice prices <RRN8> surged almost 4 percent to a
record high of $24.550 a hundredweight as panic buying
continued amid a global shortage. They are also following
strong gains by wheat prices in the past 10 months.
(Editing by Ian Geoghegan)
