* Asian stocks gain, Nikkei up 4.9 pct on govt bail-out
plan
* Yen extends losses as Japan announces fresh company aid
* Oil gains past $46 a barrel
* Gold pauses above $900 an ounce
(Updates market prices, expected start in Europe)
By Charlotte Cooper
TOKYO, Jan 27 (Reuters) - Japanese shares led Asian markets
higher, climbing 4.9 percent after Tokyo launched a $16.7
billion scheme on Tuesday to help firms threatened by the
financial crisis.
In Europe, shares were expected to open down with the focus
on earnings and a German business sentiment indicator, with
Britain's FTSE 100 <> seen falling 21 to 32 points and
Germany's DAX <> expected down 6 to 31 points.
Japan's funding plan helped the Nikkei average <> to
its biggest one-day gain in percentage terms since
mid-December, along with a fall in the yen and a 9-percent
surge in shares of Honda Motor Co <7267.T>. The carmaker
announced further production cuts in North America in Japan,
but a newspaper reported it would boost capacity in China.
[]
Japan's trade ministry said capital would be provided only
while companies faced difficulty in fund-raising due to market
turmoil, and firms receiving the funds would be required to
draw up plans to boost profitability within three years.
[]
"This news will be positive, since it's directed at firms
in general and raises hopes that this will help with
fund-raising, but the yen's fall has helped too," said Yutaka
Miura, senior technical analyst at Shinko Securities.
"We'll have good news and bad news, just one mountain after
another, before the downside really solidifies."
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> was up 1.36 percent, after a 0.48 percent gain
in the Dow Jones industrial average <> and a 0.56 percent
rise in the Standard & Poor's 500 index <.SPX> on Monday.
Many Asian markets were closed for Lunar New Year, but
Australian shares <> closed up 3 percent after a one-day
holiday, helped by miners such as Rio Tinto <RIO.AX>, which
were buoyed by a rebound in metal prices.
YEN STEPS BACK
News of the funding plan helped push the yen down against
the dollar and deepen its losses against the euro and sterling
as shares gained and investor risk tolerance appeared to pick
up.
The yen has tended to fall against higher yielding
currencies as investor risk appetite improves and the currency
had slipped on Monday after a rise in U.S. existing home sales
and British bank Barclays <BARC.L> said it was not seeking
fresh capital.
The euro was up 0.8 percent at 118.32 yen <EURJPY=R>, well
above last week's seven-year low of 112.08 yen, while sterling,
which hit a record low last week, climbed 1 percent to 125.68
yen <GBPJPY=R>. The dollar gained 0.4 percent to 89.46 yen
<JPY=>.
U.S. Treasuries edged down in Asia as shares rallied,
sapping demand for safe haven debt, and the bond market was in
wait-and-see mood ahead of a two-day Federal Open Market
Committee meeting which ends on Wednesday.
The Fed is expected to leave the target range for the
benchmark overnight federal funds rate unchanged at zero to
0.25 percent and to flesh out new ways to free up lending.
The benchmark 10-year note fell 2/32 in price to yield
2.653 percent, up about 0.5 basis point from late U.S. trade.
Japanese government bond futures dropped, tracking falls in
Treasuries and euro zone government bonds and dented by the
rebound in stocks from a three-month closing low on Monday.
Analysts warned investor sentiment could turn quickly, with
layoffs continuing and European and U.S. corporations
disclosing plans to cut more than 70,000 jobs to cope with the
downturn.
Gold <XAU=> held steady just above $900 an ounce after a
three-day rally on safe-haven buying.
Oil prices rose more than 1 percent, reversing losses as
traders focused on short-term factors, such as cold U.S.
weather and an Australian cyclone. U.S. light, sweet crude for
March delivery <CLc1> climbed back above $46 a barrel.
