* Asia shares up 0.9 pct, commodities boost resource plays
* Gold slips but holds near record high
* Dollar index drifts up but looking bleak on charts
By Eric Burroughs
HONG KONG, Oct 7 (Reuters) - Asian shares pushed up for a
second day on Wednesday, climbing back near a 13-month peak, as
gold's surge to record highs and the dollar's tumble boosted
resource shares.
Gold trimmed some gains but hovered near the all-time high
of $1,043.45 <XAU=>, compounding the dollar's woes after the
U.S. currency was hit the previous day by a report that major
countries were looking for alternatives in oil trade
settlement.
Oil prices rose 50 cents a barrel to $71.38 <CLc1>, holding
on to broad gains scored the previous day as commodities surged
on hopes that global demand was picking up.
Australian miners and Japanese trading houses were among
the big winners, with shares of Rio Tinto <RIO.AX> up 3.8
percent amd Mitsubishi Corp <8058.T> gaining 5.3 percent.
"Resources on the whole ... are leading the way on what
seems to be the ever-weakening U.S. dollar," said David
Barrett-Lennard, commodities dealer at CMC Markets.
Some investors also took heart from Australia's central
bank lifting interest rates the previous day, the first of any
Group of 20 nation to do so in a sign that the emergency
measures put in place to stem the financial crisis are
gradually being unwound.
The move fueled gains of more than 1 percent on Wall
Street, underscoring for many that the global economy was on
the mend. []
However, analysts noted that Australia is a special case
because its economy and banking system were mostly sheltered
from the global crisis and has benefitted from China's
aggressive efforts to stockpile resources and kick start
growth.
Central banks in the West are unlikely to raise rates for
some time as the strength of their economic recoveries is far
from certain.
Federal Reserve officials remain cautious about unwinding
emergency measures. Kansas City Fed President Thomas Hoenig
said late on Tuesday that the U.S. economy is clearly
recovering but that it is too soon for the Fed to withdraw its
massive support. []
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> was up 1.1 percent, with the material sector
the biggest gainer on the day. The Thomson Reuters index of
regional shares <.TRXFLDAXPU> edged up 0.7 percent.
Japan's Nikkei average <> gained 0.9 percent, with
financials getting a boost from a rise in U.S. counterparts the
previous day after Goldman Sachs upgraded the sector. The
banking sector on the Tokyo Stock Exchange first sector rose
3.6 percent.
DOLLAR ON THE BACKFOOT
The dollar edged up slightly after getting hit the previous
day by the combination of a surging Australian dollar, gold and
commodities.
The dollar index, a gauge of its performance against six
major currencies, drifted up 0.2 percent to 76.459 <.DXY> but
is still near a 13-month low of 75.827 hit in September.
The dollar edged up 0.2 percent against the yen to 88.95
yen <JPY=> but has slid back near an eight-month low of 88.23
yen hit last month. Those levels are seen as painful to
Japanese exporters by slashing the value of their overseas
revenue.
Japanese Finance Minister Hirohisa Fujii told the Wall
Street Journal that current yen levels were consistent with
acceptable market activity and were not "extremely abnormal,"
the latest signal Japan's new government is taking a more
hands-off approach on currency policy. []
Fujii and other officials have made remarks suggesting they
could intervene to stem yen strength, though many market
players believe such intervention is unlikely unless the yen's
rise becomes more volatile.
The Australian dollar <AUD=D4> hovered near 14-month highs
against the U.S. dollar in the wake of the rate increase on
Tuesday, which sent the Aussie up nearly 1.4 percent.
Government bonds slipped on the gains in stocks and
prospect of central bank rate hikes in some countries.
Korean bond futures <KTBc1> slipped 3 ticks to 108.72 after
Australia's rate hike was seen as paving the way for a move in
South Korea where its central bank is worried about a
rebounding property market.
(Additional reporting by Adrian Bathgate in Wellington)
