TOKYO (Reuters) - Asian shares edged to a two-week high on Tuesday, adding to the previous day's hefty gains on China's economic reform plans, while the dollar was hobbled by expectations the U.S. Federal Reserve will keep its stimulus a little longer.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2 percent, building on Monday's 1.4 percent rally fed by a sharp jump in Chinese stocks and heading for a fourth straight day of gains."China's reform pledge was sexier than perceived, bringing risk back into play in emerging markets including South Korea which is still comparably low valued," said Kim Yong-goo, a market analyst at Samsung Securities.
China's CSI300 Index surged 3.3 percent on Monday, its biggest one-day rise in two months, to hit a four-week peak. The index took a breather on Tuesday, slipping 0.4.
In Tokyo, the Nikkei (NIK:^9452) fell 0.8 percent, further moving away from a six-month high hit on Friday, with a trader saying domestic investors continued to cash in recent gains.
The yen was up 0.4 percent at 99.64 yen to the dollar, adding to a 0.2 percent rise overnight to end a two-day run of losses.
The euro rose 0.1 percent to $1.3515, not far from a two-week high of $1.3542 reached on Monday. Against a basket of major currencies, the dollar (.DXY) eased 0.2 percent to 80.661, languishing near a more than one-week low of 80.565 reached on Monday.
As the dollar weakened on expectations that the Fed will continue its bond-buying campaign under incoming chief Janet Yellen, the 10-year U.S. Treasuries yield slipped to below 2.70 percent.
Investors remained on guard for any clues as to when the U.S. central bank will start unwinding its $85 billion-a-month stimulus program, although many in the markets now see any move unlikely until March.
A number of Fed speakers offered more insights into the central bank's stimulus on Monday. The latest was Charles Plosser, president of the Philadelphia Fed, who said improved economic and labor market conditions suggest the Fed should set a fixed dollar amount on its current bond-buying program and end the program when that amount is reached.
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