* Asia stocks extend gains on strong U.S. earnings reports
* Explosions at Jakarta hotels weigh on local shares,
rupiah
* Korean shares touch new 2009 high
* Yen rises broadly as appetite for risk eases
* Dollar hovers near six-week low, oil falls towards $61
By Elaine Lies
TOKYO, July 17 (Reuters) - Asian shares extended gains on
Friday on hopes the global recession is receding after key U.S.
companies beat earnings expectations, but deadly blasts in
Jakarta weighed on Indonesian stocks and the rupiah.
The yen rose as Japanese exporters sold foreign currencies,
with risk appetite dulling in the wake of the explosions and
ahead of more U.S. bank earnings. Oil fell towards $61.
European shares were set to edge higher for their fifth
straight day of gains, echoing Asian and U.S. gains, financial
bookmakers said.
Blasts at the Ritz-Carlton Hotel and the Marriott Hotel in
central Jakarta killed 9, police said. A car bomb exploded
along a toll road, and Indonesia's Metro TV said two had been
killed.
Jakarta stocks <> fell 1.2 percent and the rupiah,
which has been Asia's best performing currency so far this
year, lost 1 percent before paring losses. []
Share markets have been keenly watched as a barometer of
investor confidence, but risk appetite has waned as market
players awaited earnings due out later on Friday, including
Citigroup <C.N> and Bank of America <BAC.N>.
"Already this morning there was a bit of profit-taking and
a slight move away from risk trades," said Mitul Kotecha, head
of FX strategy at Calyon in Hong Kong.
"The blasts have added to this direction in terms of risk
trades coming off," he said, while noting it wasn't a big move.
Strong earnings for major U.S. companies continued to cheer
global markets on Thursday as the quarterly reporting season
moved into higher gear, pushing U.S. share indexes up about 1
percent overnight.
JPMorgan Chase & Co <JPM.N> saw quarterly profit soar 36
percent and U.S. bellwether International Business Machines
Corp <IBM.N> strongly beat forecasts in earnings announced
after the bell. []
But amid the good news, JP Morgan reported a surge in
consumer credit losses, showing the economic recovery still has
a long way to go, and Citigroup and Bank of America were
expected to post relatively weaker performances, one trader
said.
"Earnings from U.S. banks have been upbeat, but there are
concerns that the positive results could be limited to the
second quarter," said Takahiko Murai, general manager of
equities at Nozomi Securities.
Asian shares ex-Japan rose 0.7 percent and looked on track
for their highest close in a month. The index rose over 5
percent on the week, taking its gains so far this year to
around 34 percent. <.MIAPJ0000PUS>
Asia ex-Japan equity funds were the only ones of the four
major emerging markets fund groups to see inflows during the
second week of July, according to global fund tracker EPFR,
while Japan equity funds recorded inflows for the third
straight week.
Japan's benchmark Nikkei <> clawed up 0.6 percent to
9,395.32. Gains have been limited by political uncertainty
since Monday, when embattled Prime Minister Taro Aso said he
aimed to call an election for Aug. 30, despite grim prospects
for his long-ruling conservative party. []
Korean shares <> climbed 0.6 percent after rising as
far as 1,445.60, a new 2009 high, with gains fueled by tech
shares such as LG Display <034220.KS> and LG Electronics
<066570.KS>.
RUPIAH FALLS, YEN GAINS
The Indonesian rupiah <IDR=> fell 0.7 percent to 10,200 per
dollar in the wake of the explosions, prompting state banks to
sell dollars to support it, traders said.
"I would say it damages foreign investor confidence since
the attacks appear aimed at Westerners, but not shatters it, so
long as there is no further violence for some time," said Sean
Callow, a currency strategist at Westpac in Sydney.
The dollar, which has been a defensive play for investors
in the global economic crisis, hit a six-week low at 79.131
against the basket of six currencies <.DXY> on Thursday.
It later rebounded after data showed factory activity in
the U.S. mid-Atlantic region contracted for a 10th straight
month in July, and was holding at 79.364 at 0605 GMT.
[] and []
But the yen edged up against a range of currencies as risk
appetite abated, although it had pared earlier gains.
The greenback edged down against the yen, slipping 0.2
percent to 93.72 <JPY=>. The Australian dollar slipped 0.6
percent to 75.04 yen <AUDJPY=> while the kiwi edged down 0.6
percent to 60.34 yen. <NZDJPY=>
Yields on U.S. 10-year Treasury notes <US10YT=RR> stood at
3.550 percent, down nearly one basis point from U.S. trade but
up from a two-month low of 3.26 percent hit on Monday.
September JGB futures rose 0.03 point to 138.62 <2JGBv1>
after a smooth five-year debt sale on Thursday, still down from
a 3-1/2-mth peak of 138.97 hit last week.
Spot gold <XAU=> was at $937.20, edging up from Thurday's
New York notional close of $936.35.
(Additional reporting by Shinichi Saoshiro, Charlotte Cooper
and the Jakarta newsroom; Editing by Kim Coghill)
