* JPMorgan, Google results burnish rebound in risk taking
* Money flows to emerging market stocks, US bonds - EPFR
* Yen under pressure as equities keep rising
By Kevin Plumberg
HONG KONG, April 17 (Reuters) - Asian stocks rose on Friday
and the yen slipped, after upbeat results from JPMorgan and
Google kept a revival of risk taking alive, with Asian shares
outside Japan on track for a sixth week of gains.
A jump in Chinese industrial output in March has added to a
sense previously instilled by U.S. indicators that the pace of
deterioration has slowed from the alarming rate of just a few
months ago.
Still, comments from policymakers about the economic
outlook were cautious and hardly embraced the potential for a
speedy recovery. Federal Reserve official Janet Yellen said in
a speech there are tentative signs of stability but it was
still impossible to know how deep the U.S. recession will
ultimately be. []
Higher-yielding currencies, like the Australian dollar and
New Zealand dollar, have been rallying alongside global equity
markets, but not to same extent, with currency dealers still
concerned about the mixed bag of economic data around the
world.
"Corporate reports allowed negative developments to be
overlooked," said Dariusz Kowalczyk, chief investment
strategist with SJS Markets in Hong Kong, in a note to clients.
"As a result, risk appetite continued to improve,
depressing prices of sovereign developed debt and lifting
prices of equities, corporate credit and most commodities."
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> was up 1.1 percent on the day and trying to
close higher for a sixth consecutive week. That would be the
longest weekly string of gains since the second half of 2007,
when the bull market reached its apex.
Japan's Nikkei share average <> climbed 1.7 percent,
with investors selling defensive industries like
pharmaceuticals and buying industries sensitive to business
cycles like automakers.
Shares of Mitsubishi UFJ Financial Group <8306.T>, the
country's largest bank, rose 1.6 percent, supported after first
quarter profits at JPMorgan <JPM.N> topped estimates though
they were still down some 40 percent from a year ago.
[]
Citigroup <C.N> is expected to report its first quarter
results before Wall Street opens for trading.
Taiwan's tech-filled TAIEX index <> was up 1.1
percent, set for a ninth week of gains. Taiwan, a weather vane
for U.S. and Chinese demand, has been a regional leader in the
equity rally that has lasted for more than a month.
WHAT THE FLOWS SHOW
Globally, investors have been slowly reducing their cash
piles and putting the money to work in emerging markets and
mostly U.S. corporate bonds.
Year-to-date emerging market equity funds have received
$7.3 billion in new investment, while developed market stock
funds have had net redemptions of $56.1 billion, Boston-based
research firm EPFR Global said in a note.
At the heart of the sustained improvement in willingness to
take risks for higher returns is a belief that after the
crisis, big developing nations like China and Brazil will have
a much more powerful place in the global economy.
Chinas determination to sustain 8 percent plus GDP growth
remains the cornerstone of the latest surge in risk appetite,
even though it was only able to eke out 6.1 percent growth in
the first quarter said Cameron Brandt, senior analyst with
EPFR.
The flow data for April clearly favours China and a lot of
the markets -- Brazil, Canada, Australia, and South Africa for
example -- that will benefit from its demand for raw materials.
The yen slipped as modest risk taking returned as equities
rose. The dollar rose 0.3 percent to 99.65 yen, after briefly
slipping below its 200-day moving average on Thursday.
The euro strengthened 0.1 percent to 131.05 yen <EURJPY=R>
but slipped 0.3 percent to $1.3149 <EUR=>.
The Australian dollar has gained some 14 yen since
February, but has had trouble hurdling a few technical
obstacles between 72 yen and 74 yen. The Australian dollar was
up 0.3 percent on the day at 71.78 yen <AUDJPY=R>.
Activity in the Japanese government bond cash market was
quiet ahead of the outcome of a meeting between the Ministry of
Finance and primary dealers. Some in the market believe new
debt issuance in term of maturities will be discussed.
Abundant new supply of government debt to finance economic
rescue plans has also been a theme that has weighed on U.S.
Treasuries.
The yield on the benchmark 10-year Treasury note was
unchanged from late in New York, at 2.84 percent. Treasuries
took a beating on Thursday as global stocks climbed.
Commodity prices struggled to add to recent gains, with
mixed U.S. and Chinese economic data making the outlook for
demand unclear.
U.S. crude for May delivery fell 0.3 percent to $49.82 a
barrel after a 1.5 percent rise overnight. Economic readings in
both China and the United States have been both less dire
recently, though that has not necessarily translated into more
demand for energy.
The American Petroleum Institute said on Thursday U.S.
demand for crude and petroleum products fell 2.2 percent in
March.
