* JPMorgan, Google results burnish rebound in risk taking
* Money flows to emerging market stocks, US bonds - EPFR
* Euro falls with Trichet unclear on quantitative easing
By Kevin Plumberg
HONG KONG, April 17 (Reuters) - Asian stocks rose on Friday
after results from JPMorgan and Google kept shares on track for
a sixth week of gains, while the euro fell to a one-month low
on uncertainty over what non-standard policy action the
European Central Bank will enact.
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, supporting a month-long rally in global stocks.
Still, comments from policy makers 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> edged up 0.3 percent on the day, set 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 <> tumbled 4 percent,
the biggest single-day decline in three months, after dealers
closed out positions after the index failed to stay above
6,000. Taiwan, a weather vane for U.S. and Chinese demand, has
been a regional leader in the equity rally.
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.
China's 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 euro came under pressure after European Central Bank
President Jean-Claude Trichet in a speech in Tokyo did not give
more details on unorthodox policy steps that investors widely
expect the central bank to take.
The euro fell to a one-month low of $1.3065 before
recovering a bit to $1.3085 <EUR=>, down around 0.7 percent on
the day.
"The euro would be sold off if the ECB takes quantitative
easing policy. At the same time, the currency would weaken in
the long-term even if the central bank does not adopt it as
such decision could delay a recovery in the euro zone," said
Tsutomu Soma, senior manager in the foreign securities
department at Okasan Securities in Japan..
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 weighed on U.S. Treasuries.
The yield on the benchmark 10-year Treasury note was
roughly unchanged from late in New York, at 2.83 percent
<US10YT=RR>. Treasuries took a beating on Thursday as global
stocks climbed.
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.
