(Corrects second-last paragraph to read freeze, not free)
* Asia stocks edge up, Nikkei at 6-wk closing high
* Dollar and yen slip as riskier assets benefit
* Japan industrial output posts record drop
By Eric Burroughs
HONG KONG, Dec 26 (Reuters) - Asia stocks edged up on
Friday and Japan's Nikkei average posted its highest close in
six weeks as investors bet a raft of government measures will
help the global economy recover next year.
The dollar and yen slipped as portfolio managers shifted
some funds into riskier assets while preparing to close their
books for the year.
Japan's Nikkei average <> pushed up 1.6 percent as
some battered shares such as Toyota Motor Corp <7203.T> got a
lift from such portfolio window-dressing despite data showing a
record plunge in industrial production in November.
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Japanese governments bonds climbed, driving the 20-year
yield to a five-year low, on regular month-end buying from
pension funds and other data pointing to a return of deflation
next year.
Investors have largely shrugged off the array of bleak
reports showing the financial crisis dealt a severe blow to the
global economy at the end of 2008, instead looking ahead to see
how government efforts to revive growth will work next year.
"Past experience shows that stock prices tend to gain
around the year-end and the start of the year on hopes for the
coming year. But it's not as if investors can keep buying this
time around as the outlook for the economy is murky," said
Yutaka Miura, a senior technical analyst at Shinko Securities.
Japanese Economics Minister Kaoru Yosano told Reuters in an
interview that Tokyo may take more fiscal spending measures if
economic conditions worsen further, on top of a stimulus
package totalling 75 trillion yen ($829 billion).
Trading activity was light with many financial markets
closed following Christmas Day. Markets in Hong Kong and
Australia were closed. Many markets in Europe will remain
closed, even as U.S. markets will reopen.
The MSCI index of Asia-Pacific shares outside Japan
<..MIAPJ0000PUS> gained 0.1 percent but was down 2 percent this
week and 55 percent this year, on track for the biggest yearly
loss in its 20-year history.
Taiwan's TAIEX index <> inched up 0.3 percent after
the government pledged to help flat-screen television makers in
the latest effort to prop up the country's tech industry. AU
Optronics <2409.TW>, the world's No. 3 LCD maker, jumped 2.5
percent.
South Korea's KOSPI <> fell 0.9 percent on worries
that companies would issue slim year-end dividends.
The dollar and yen dipped against most major currencies.
The euro edged up 0.3 percent to $1.4050 <EUR=>, while single
currency rose 0.3 percernt to 127.10 yen <JPY=>. As the dollar
slipped, gold edged up $4 an ounce to $848 <XAU=>.
JGBs gained across the board, extending a winning streak
since the Bank of Japan cut rates to 0.1 percent last week,
boost its monthly purchases of government bonds and said it was
taking more steps to alleviate the freeze in credit markets.
The yield on benchmark 10-year JGBs <JP10YTN=JBTC> dipped a
basis point to 1.200 percent, holding near a 3-1/2-year low.
The 20-year yield <JP20YTN=JBTC> dropped 6.5 basis points to
1.755 percent and was down 16 basis points this week.
(Additional reporting by Aiko Hayashi in TOKYO; Editing by
Lincoln Feast)
