TOKYO (Reuters) - Asian stocks
were up slightly in a cautious start to the week on Monday, with
investors holding out hopes that China would take steps to stimulate its
economy.
MSCI's broadest index of Asia-Pacific shares outside
Japan tacked on 0.3 percent after rising to a three-week high on Friday
on heightened speculation Beijing will launch new spending measures and
on reduced tensions in Ukraine.
Tokyo's Nikkei stock average (NIK:^9452) rose 0.4 percent.
China's
Premier Li Keqiang on Friday sought to reassure jittery global
investors that Beijing was ready to support the cooling economy, saying
the government had the necessary policies in place and would push ahead
with infrastructure investment.
China stimulus hopes were unable
to shore up all equity markets in Asia, however, with South Korea's
KOSPI (.KS11) trading nearly flat.
"It's difficult for the market
to solely move on talks about stimulus with no concrete plan to back
them up," said Kim Yong-goo, an analyst at Samsung Securities in Seoul.
The
euro lingered near a one-month low hit against the dollar on Friday
after an unexpected drop in Spanish and German inflation bolstered
expectations the European Central Bank could further ease monetary
policy as early as Thursday.
"It all depends on whether the ECB
views the recent slowdown as a temporary pullback or a deeper problem.
Given the abundance of policymakers talking about the possibility of
negative rates, we believe they are growing more concerned about growth
and inflation," Kathy Lien, managing director at BK Asset Management in
New York, wrote in a note to clients.
The euro was already under
pressure after suggestions of more ECB action last week from Germany -
whose policymakers have in the past repeatedly voiced concerns about
unorthodox monetary easing.
The
focus now turns to euro zone inflation figures due later in the global
session in light of Friday's weak Spanish and German inflation data.
The euro was little changed at $1.3752 after hitting a one-month low of $1.3704 on Friday.
YELLEN, U.S. DATA EYED
The
dollar drew support from a rise in U.S. Treasury yields amid hopes that
the Federal Reserve will taper its massive monetary easing and pave the
way for an eventual rate hike.
Yields
of intermediate-dated Treasury notes neared two-month highs on Friday.
The sustained pressure on yields follows comments from Federal Reserve
Chair Janet Yellen earlier this month that raised the possibility of
rate hikes starting as early as the spring of 2015.
Yellen
will speak in Chicago later in the session and the focus is on whether
she maintains her stance on rates, which the market has interpreted as
hawkish.
Investors will also
have a chance to begin gauging whether the frigid winter was really the
key cause behind the string of soft U.S. data seen earlier this year,
with the March Chicago PMI due later in the session.
The dollar was nearly flat at 102.83 yen, hovering below a two-week peak of 102.98 reached on Friday.
In
the commodities markets, gold remained under pressure amid an
improvement in risk appetite following upbeat U.S. consumer spending
data that brightened prospects for the economy.
Spot gold traded at $1,295.61 an ounce, near a six-week low of $1,285.34 hit on Friday.
Prospects
for Chinese stimulus lifted copper, but the metal was still on track to
close March with its biggest monthly fall since June as the world's
second-largest economy is still expected to face a slow first quarter.
(MET/L)
Three-month copper on the London Metal Exchange briefly
touched a three-week high of $6,680.00 a tonne, but prices are still on
track to close the month down about 5 percent.
Simmering tensions
between Russia and the West and disruptions to African oil supplies
helped U.S. crude trade near a three-week high. (O/R)
U.S. crude for May delivery edged down 22 cents to $101.45 a barrel after settling on Friday at its highest since March 7.
(Additional reporting by Jungmin Jang in Seoul; Editing by Shri Navaratnam)
Pradeep Shukla
PGDM2 SEM
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