* Asian stocks up 0.7 pct, near 22-month highs
* Copper, oil also gain on global growth expectations
* Euro struggles near 11-mth lows on fresh Greece worries
By Koh Gui Qing
SYDNEY, April 7 (Reuters) - Asian stocks neared 22-month
highs on Wednesday as regional investors largely shrugged off
festering worries about fiscal problems in Europe and focused
on a recovery in the world economy.
The upbeat mood about global growth was also reflected in
commodity markets, with copper prices hovering near 20-month
highs and oil prices near 18-month peaks.
Financial spreadbetters expected Britain's FTSE 100 <>
to open down 2 to 4 points, Germany's DAX <> to open up
11 points, and France's CAC 40 <> to open down 2 to 3
points.
While worries about Greece's ability to cut its mountain of
debt continued to weigh on the euro <EUR=>, those concerns
scarcely caused a ripple in Asian markets. Instead, some
investors cited profit-taking as the biggest near-term threat
to the regional rally in stocks, bonds and currencies.
A recent run of strong U.S. data from jobs to manufacturing
and service activity have fanned hopes the world's biggest
economy was slowly stirring again.
Mounting expectations that China may revalue the yuan some
time this year also bolstered the appeal of regional currencies
and assets.
Underscoring Asia's bright growth prospects, the World Bank
sharply raised its forecasts for economic growth in East Asia
to 8.7 percent on Wednesday, up from its previous 7.8 percent
estimate, led by China. []
"Current economic data does seem to suggest the (Chinese)
economy is churning along nicely," said Belle Liang, head of
research at Core Pacific-Yamaichi.
"The market is also speculating that the yuan will
appreciate this year, leading to some currency inflows today."
China hinted at its readiness to let the yuan rise on
Wednesday by alerting exporters to potential risks.
[] The market expects the yuan to rise by 3
percent against the U.S. dollar in the next year. []
That has lifted other Asian currencies seen as proxies for
the yuan, especially the Malaysian ringgit <MYR=>, which has
risen 7 percent this year.
The MSCI's broad measure of shares in the Asia-Pacific
outside Japan <.MIAPJ0000PUS> rose 0.7 percent on Wednesday,
nearing levels last seen in June 2008.
It has gained nearly 5 percent so far this year and an
impressive 73 percent since the end of 2008, more than double
the 30 percent jump in the U.S. S&P 500 <.SPX> over the same
period as Asia rebounds from the global crisis far faster than
major Western economies.
RIPE FOR PULLBACK
But the Asia ex-Japan index looks increasingly ripe for a
pullback, with the 14-day relative strength index reading 83,
well above the 70 mark which points to a market being
overbought.
Hong Kong shares were among the strongest risers on
Wednesday, with the Hang Seng Index <> up as high as 1.5
percent as traders returned from a five-day holiday weekend and
caught up to gains elsewhere in the world that have been fueled
by upbeat U.S. economic data.
Japan's Nikkei <> was flat as the Bank of Japan
concluded its policy meeting by keeping interest rates steady
at 0.1 percent, as expected.
Copper <CMCU3> was strong just under $8,000 a tonne after
touching a 20-month high of $8,010 the previous day.
Still, it is not clear skies ahead for world markets. The
global economy could slip again when monetary and fiscal
stimulus are withdrawn; U.S. unemployment is still stubbornly
high, and the euro zone is plauged by doubts of its viability.
The struggling euro <EUR=> took another knock from worries
around Greece's fiscal problems. The common currency was soft
at $1.3363, within sight of an 11-month trough of $1.3265 hit
late in March.
Hourly charts show if the euro breaches $1.3342, which
marks the 76.4 percent retracement level of its ascent from
$1.3265 to $1.3591, it may force it to retest levels around
$1.3260.
The latest wave of selling, which traders said was led by
macro hedge funds, was set off by reports that Greece wants to
amend an EU-IMF safety net deal set up late last month to help
pay for its debts in an emergency.
Although Greece denied the reports, the market paid no heed
and continued to bet on Athens having troubles cutting its debt
burden, even as its borrowing costs mount.
Investors demanded a yield of close to 7.5 percent for
buying 10-year Greek bonds <0#GRBMK=TWEB>. That is nearly 100
basis points above levels seen last week, and over 400 basis
points above German Bunds <0#DEBMK=TWEB>, the biggest premium
since Greece joined the euro in 2001.
(Additional reporting by Kelvin Soh in HONG KONG and Samuel
Shen in SHANGHAI)
(Editing by Raju Gopalakrishnan)
