* Stocks hold gains, extend multi-week highs
* Gold reaches all-time high above $1,274 per ounce
* Yen at 15-year peak after prime minister survives vote
* German economic sentiment slips
By Daniel Bases
NEW YORK, Sept 14 (Reuters) - The U.S. dollar fell to a
fresh 15-year low against the yen and a one-month nadir versus
the euro on Tuesday while share prices edged up to fresh
multi-week highs, driven by technology and retail stocks.
The greenback's decline accelerated after Prime Minister
Naoto Kan won an unexpectedly decisive victory in a ruling
party vote. Markets were braced for a shift toward yen
intervention if Kan lost the contest to a rival who argued more
forcefully for a weaker currency.
The yen traded below 83 per U.S. dollar and the euro hit a
one-month high against the greenback, breaking above $1.30.
Gold rose to a record high above $1,270 an ounce, aided by
the weakness in the U.S. dollar. Oil edged up in cautious trade
ahead of weekly oil inventory reports. []
Stronger-than-expected U.S. retail sales and a raised
outlook from U.S. electronics retailer Best Buy <BBY.N> helped
limit equity sales by investors looking to lock in profits.
"Jeans, T-shirts are big items, but computers and
electronics in general have really overtaken back-to-school.
And the big fear was the back to school (consumer) rolled up
and died this year, and it doesn't look like that happened,"
said Kim Caughey, senior equity research analyst at Fort Pitt
Capital Group in Pittsburgh.
U.S. equities made fresh five-week highs, recouping some
early session losses. In midday New York trade, the Dow Jones
industrial average <> rose 31.56 points, or 0.30 percent,
at 10,575.69. The Standard & Poor's 500 Index <.SPX> gained
3.74 points, or 0.33 percent, at 1,125.64. The Nasdaq Composite
Index <> climbed 14.31 points, or 0.63 percent, at
2,300.02.
European shares drifted lower into the close. The
FTSEurofirst 300 <> index of top European shares ended
the session down 0.03 percent at 1,087.63 in a choppy session
after closing on Monday at its highest level since late April.
Outsource firm Capita <CPI.L> rose 2.87 percent after
investors were reassured about public sector contracts, while
Dutch group Philips <PHG.AS> fell 3.86 percent after announcing
what analysts said were unambitious growth targets.
MSCI's All-Country World Index <.MIWD00000PUS> traded at a
four-month high, up 0.57 percent on the day.
Tokyo's benchmark Nikkei-225 stock index <> finished
down 0.24 percent.
"Kan's not very attractive for the markets. It will
probably mean more of the same in terms of policy, so there is
no reason to welcome him," said Mitsuhige Akino, chief fund
manager at Ichiyoshi Investment Management.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
"Fear" and shopping - U.S. retail sales in a volatile market
environment. For
graphic: http://link.reuters.com/zux72p
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
YEN PLAY
The yen traded at 82.99 <JPY=> against the U.S. dollar,
down 0.82 percent,
its strongest level since mid-1995.
Prime Minister Kan's victory over party heavyweight Ichiro
Ozawa, who had made more strident calls to curb the yen's rise,
raised speculation Japanese authorities would not intervene
imminently.
The Kan victory provided "positive yen news," said Joseph
Trevisani, chief analyst at FX Solutions in Saddle River, New
Jersey. But he added that "83 has no more meaning than the
typical round number in dollar/yen. The level to look at is the
all-time low," which comes in around 79.75 yen.
The euro traded up 1.06 percent at $1.3015 while the
Australian dollar reached a two-year high against the U.S.
dollar at $0.9443 <AUD=D4> up 0.93 percent.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
PDF presentation on the yen: http://r.reuters.com/zuz33p
PDF on Japan leadership vote: http://r.reuters.com/vyk92p
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Government debt prices were generally stronger in a
flight-to-safety trade, despite the U.S. retail sales report,
which contrasted with a survey showing economic sentiment in
Germany fell more than forecast in September. The ZEW survey
turned negative for the first time since March 2009 and threw
into doubt the economic recovery of Europe's largest economy.
[]
December Bund futures <FGBLZ0> rose 64 basis points to
130.56, off an early high in the 130.70 range. Benchmark
10-year U.S. Treasuries <US10YT=RR> rose 19/32 of a point in
price, pushing the yield down to 2.68 percent.
U.S. light sweet crude oil <CLc1> slipped 55 cents to
$76.64 per barrel.
Spot gold prices <XAU=> rose $24.35 to $1269.30, just off
its all-time high.
(Additional reporting by Nick Olivari, Leah Schnurr,
Jessica Mortimer, Tamawa Desai, Shinichi Saoshiro and Aiko
Hayashi; Editing by Dan Andrew Hay)
