* Asian shares rise to 11-week high on U.S. economic data
* Dollar up as doubts over reserve currency status ease
* U.S. Treasuries steady after drop on tepid 5-yr auction
* NZ bonds drop sharply; c.bank denies emergency meeting
(Repeats item to more subscribers without changes in text)
By Rafael Nam
HONG KONG, March 26 (Reuters) - Asian shares hit their
highest level in 11 weeks on Thursday on hopes the U.S.
economic downturn may be easing, while the dollar recovered
after its latest wobble about its status as the main reserve
currency.
The dollar fell against major currencies on Wednesday after
U.S. Treasury Secretary Tim Geithner suggested he was open to
expanding the use of the International Monetary Fund's special
drawing rights, appearing to endorse an idea put forward by
China.
Regional bonds were hit by stock market gains, while U.S.
Treasuries steadied after falling on Wednesday on concerns that
a planned surge in government debt supply to fund stimulus
plans would struggle to find sufficient demand.
Stock markets preferred to focus on unexpectedly strong
U.S. housing and durable goods data as a sign that the world's
biggest economy may be over the worst, which fuelled a late
rally on Wall Street and provided a cue for Asia.
[]
"The main factor holding the market up is increased
optimism regarding an economic recovery later this year," said
Shane Oliver, head of investment strategy at AMP Capital
Investors on the stock market rally.
"It remains to be seen whether we have seen the bottom or
not, but the rally we've been seeing in the last few weeks
probably still has a bit further to go," he added.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> gained for a fourth consecutive session and was
last up 1.5 percent after earlier hitting its highest since
Jan. 8.
Japan's Nikkei average <> gained 0.5 percent.
An easing of concerns about the U.S. economy and its banks,
plus hopes the U.S. government is getting to grips with toxic
assets has fuelled a rise of 18 percent in the MSCI ex Asia
index so far this month.
But officials urged more global action.
Monetary and fiscal authorities have plenty of ammunition
to combat the deepest downturn in decades and the measures
already taken will be critical in driving a recovery, the
presidents of the Federal Reserve banks of San Francisco and
Cleveland said in separate remarks on Wednesday.
[]
Chinese Finance Minister Xie Xuren said countries should
increase their economic stimulus packages if need be to boost
market confidence, while a senior IMF official warned the world
economy will not start its recovery as expected in 2010 if
countries withdraw fiscal stimulus too soon. []
Stock indexes in Hong Kong <>, Shanghai <> and
Singapore <.FTSTIL> gained about 1-2 percent each. Shares in
South Korea <>, Taiwan <> and Australia <> rose
about 1 percent each.
Among the day's leading gainers, Hong Kong-listed ICBC
<1398.HK> shares jumped 11 percent after Goldman Sachs <GS.N>
pledged to extend the lockup on most of its stake in the
state-run bank. []
Japan's Elpida Memory Inc <6665.T> surged 18 percent after
announcing a plan on Wednesday to raise $471 million eased
concerns it would breach debt covenants. []
DOLLAR DOUBTS
On Thursday the dollar rose 0.2 percent to 97.72 yen
<JPY=>, recovering from a slide on Wednesday that pushed it to
96.90 yen.
Geithner told policy-makers and business executives at the
Council on Foreign Relations that he was "quite open" to a
Chinese suggestion to move toward greater use of SDRs, a basket
fo dollars, euros, sterling and the yen, used by the IMF.
[
Earlier this week, Chinese central bank governor Zhou
Xiaochuan said the world should consider using the IMF's SDRs
basket as a super-sovereign reserve currency.
But the dollar pared losses after Geithner reiterated that
he expected the currency to remain the top reserve currency for
a long time.
The euro was steady at $1.3590 <EUR=>, having pulled back
from Wednesday's high of $1.3653.
Increasing risk appetite is taking away some of the bid for
safe-haven debt. But bonds are also being undermined by
concerns of massive government supplies to fund stimulus plans.
U.S. Treasuries steadied on Thursday after yields reached
their highest levels in a week on Wednesday following tepid
demand in a record-large auction of five-year Treasury notes.
The U.S. Treasury is set to auction $24 billion of
seven-year notes <US7YT=RR> on Thursday, bringing the week's
total issuance to a record $98 billion. [ID:nN25665649]
Benchmark 10-year Treasury notes <US10YT=RR> traded steady
at a yield of 2.78 percent.
New Zealand bonds fell sharply, sending yields as much as
35 basis points higher on the day as the central bank denied
market speculation it would hold an emergency meeting to
discuss a sharp spike in five-year bonds. []
In commodity markets, oil prices <CLc1> advanced 48 cents
to $53.25, while gold prices <XAU=> were steady at $933.10 an
ounce.
