* MSCI Asia ex-Japan at 16-month peak, Nikkei at 7-1/2-mth
high
* Dollar broadly pressured ahead of Fed outcome
* North Korean rocket launch shrugged off
By Chikako Mogi
TOKYO, Dec 12 (Reuters) – Asian shares rose on Wednesday
buoyed by strength in global equities markets, firmer economic
sentiment in Germany and hopes of a deal from U.S. budget talks,
while the dollar came under pressure ahead of the Federal
Reserve’s policy decision.
MSCI’s broadest index of Asia-Pacific shares outside Japan
gained 0.5 percent to a 16-month peak. The index
has hit successive 16-month highs since Dec. 5.
Australian shares were up 0.4 after touching a
nearly 17-month high on the back of Wall Street gains and higher
iron ore prices.
“Definitely the momentum is to the upside,” said Stan Shamu,
a market analyst at IG Markets. “Everyone seems to be pricing in
a fairly positive outcome to the fiscal cliff negotiations as
well.”
South Korean shares inched up 0.2 percent, shrugging
off news of North Korea’s rocket launch, but profit-taking on
large caps limited gains.
“North Korea is no longer an economic match for the South,
so, short of a full-scale conflict, the North’s actions will
have little impact on the KOSPI,” Im No-jung, chief economist at
IM Investment & Securities, said of the Seoul stock market.
North Korea launched the second rocket this year on
Wednesday just before 10 a.m. and may have finally succeeded in
putting a satellite into space, the stated aim of what critics
say is a disguised ballistic missile test.
Japan’s Nikkei share average rose 0.5 percent after
hitting a 7-1/2-month high earlier, led by gains in tech shares
and other exporters on the weak yen.
The dollar remained broadly under pressure on expectations
the Fed will take further monetary easing step, pushing the
currency down to a three-month low against the Australian
dollar. The euro popped back above $1.3000, pulling away
from a two-week low of $1.2876 plumbed Friday.
The Fed is expected to announce it will buy $45 billion per
month of longer-dated Treasuries beginning in January on top of
the $40 billion in mortgage-backed security purchases it
announced in September. The new buying will replace the Fed’s
current programme, Operation Twist, which expires at the end of
December.
“Although the view that the Fed will shift to outright
Treasury purchases is now very widely shared by market
participants, we do not believe it has been fully reflected into
markets or in positioning,” said Vassili Serebriakov, a
strategist at BNP Paribas.
“Accordingly, dollar weakness is highly likely should the
Fed shift to outright U.S. Treasury purchases.”
Against the yen, the dollar steadied at 82.54 yen.
The Japanese currency has also been pressured by expectations
for more easing from the Bank of Japan, which meets next week.
Data on Wednesday showed Japan’s core machinery orders rose
2.6 percent in October from the previous month, up for the first
time in three months but below a 3 percent rise forecast,
highlighting how uncertainty over the global outlook continued
to weigh on business investment and the broader economy.
Investors also closely followed developments in U.S. budget
talks to avert the “fiscal cliff,” some $600 billion of tax
hikes and spending cuts scheduled to start in January, which
economists have warned could send the U.S. economy into
recession and drag down the fragile global economy.
Negotiations to avert the “fiscal cliff” ahead of a year-end
deadline intensified as President Barack Obama and U.S. House of
Representatives Speaker John Boehner spoke by phone on Tuesday
after exchanging new proposals, in a possible sign of progress
ahead of the end-of-year deadline
A group of high-profile chief executives urged President
Barack Obama and Republican congressional leaders on Tuesday to
strike a deal, reflecting mounting urgency to resolve the issue
with time running out.
U.S. crude futures inched up 0.2 percent to $85.96 a
barrel and Brent rose 0.3 percent to $108.37.
