* Yen under pressure on talk BOJ will relax policy further
* Global stocks edge up to seven-week highs
* Oil holds above $82, gold off two-week low
By Ian Chua
LONDON, March 12 (Reuters) - Global stocks rose to seven
week highs on Friday led by bank shares after talks on U.S.
banking reform collapsed, while speculation the Bank of Japan
may soon ease monetary policy weighed on the yen.
Oil <CLc1> held its ground above $82 a barrel, poised for a
second consecutive weekly increase on views that energy demand
would continue to grow and further helped by a generally softer
dollar, which also supported gold prices.
The pan-European FTSEurofirst 300 index of top shares
<> edged up 0.3 percent, with banks among the biggest
sector gainers.
Barclays <BARC.L>, Societe Generale <SOGN.PA>, BNP Paribas
<BNPP.PA> and Deutsche Bank <DBKGn.DE> were all up between 0.5
and 1.8 percent.
Chances of a broad overhaul of U.S. financial regulation
dimmed on Thursday after bipartisan Senate talks collapsed,
jeopardising a top Obama administration priority.
[]
"We'll see a very controlled rally today which is brought on
by our rather lacklustre performance yesterday and (equities in)
New York being relatively positive," said David Buik, senior
partner at BGC Partners.
MSCI's world stock index <.MIWD00000PUS> rose 0.3 percent to
highs last seen on Jan. 21, while emerging markets equities
<.MSCIEF> gained 0.4 percent. Japan's Nikkei advanced 0.8
percent with exporters helped by a weaker yen.
Global stocks have been pushing higher since early February,
helped by recent improving sentiment around Greece's debt woes,
hopes for economic recovery and robust fund flows. Most major
equity indexes are now in positive territory for the year.
Still, Greece's fiscal crisis has been a drag on some fund
groups, said fund tracker EPFR Global, noting Europe Equity
Funds posted outflows of $502 million for the week ended March
10, the seventh weekly outflows in eight weeks.
In contrast, investors ploughed record amounts of cash into
emerging market and high yield bond funds that week.
[]
YEN PRESSURED
Mounting expectations the BoJ will ease monetary policy next
week weighed on the yen, which fell broadly.
The euro scaled a two-week peak of 124.30 yen <EURJPY=>,
while the dollar hovered near a two-week high of around 90.82
yen <JPY=> set on Wednesday.
Japan's prime minister said the government and the BoJ
should work together to beat deflation as he fended off mounting
political pressure for action on the economy and the yen.
[]
"Yet more speculation that the BOJ could further relax
monetary policy to stimulate the economy may put the yen on the
defensive today," said Stuart Bennett, currency analyst at
Credit Agricole CIB.
Commodity currencies such as the Australian dollar <AUD=>
were stronger against the dollar, but analysts at BNP Paribas
urged caution due to the prospect of China taking further policy
tightening measures.
"There is also some speculation that the Chinese monetary
authorities could take further action today given that bank
reserve requirement ratio increases were announced on the 12
January and 12 February," they said in a note.
With stocks holding firm, major government bond prices
mostly fell, driving yields higher. The U.S. 10-year yield
<US10YT=RR> edged up 0.6 basis points to 3.73 percent, while the
equivalent German Bund yield <EU10YT=RR> gained 1.6 bps to 3.192
percent.
U.S. crude <CLc1> rose 0.3 percent to $82.36 a barrel while
copper <MCU3=LX> drifted 0.2 percent higher to $7,480.00 a
tonne.
Spot gold <XAU=> was at $1,114.90 an ounce, up about $5 from
New York's notional close on Thursday, when it hit a low of
around $1,100, its weakest since Jan. 25.
(Additional reporting by Harpreet Bhal and Tamawa Desai)
