By Chikako Mogi
TOKYO, Jan 31 (Reuters) - Asian shares pulled back from
recent rallies on Thursday but optimism about global growth
supported sentiment as the Federal Reserve kept its stimulus
policy, while the euro steadied on signs the region was
stabilising from the debt crisis.
The MSCI's broadest index of Asia-Pacific shares outside
Japan inched down 0.1 percent after rising to
nearly an 18-month high the previous session.
Australian shares also edged down 0.1 percent,
retreating from a 21-month high hit on Wednesday. The shares had
gained for 10 straight days, the longest winning run since
South Korean shares opened down 0.2 percent and
Japan's benchmark Nikkei stock average also opened 0.5
percent lower after soaring 2.3 percent to a 33-month high the
'The Nikkei is at a very high level. I think we will see
some profit-taking in today's market,' said Takashi Hiroki,
chief strategist at Monex Inc.
The Fed on Wednesday kept its monthly bond-buying plan while
indicating a recent stall in U.S. economic growth was likely
temporary and predicting the nation's job market would continue
to improve at a modest pace. The Fed repeated a pledge to keep
purchasing securities until the outlook for employment 'improves
The statement preceded Friday's monthly nonfarm payrolls
data but followed a report showing the U.S. economy unexpectedly
shrank in the fourth quarter for its first drop since the
recession ended over three years ago, as inventory investment
slowed and government spending plunged.
Analysts say, however, the private sector spending
components such as personal consumption, business investment and
housing were strong to underline a moderate recovery trend.
U.S. stocks pulled back after the Fed announcement in a move
many saw as a reaction to gains in recent months, with the
Standard & Poor's 500 Index on track to post its best
month since October 2011 and its best January since 1997.
European shares suffered their biggest daily drop this month
after gloomy earnings and weak U.S. economic data hit sentiment,
having touched 2-year highs earlier in the week.
EURO ADVANTAGE INTACT
The euro held near a 14-month high of $1.3588 scaled
on Wednesday after the Fed pledged to keep its current
bond-buying stimulus scheme.
Reports from the euro zone on Wednesday underscored views
that the debt crisis-hit region may be overcoming the worst,
with economic sentiment improving more than expected across all
sectors in January and a gauge for the phase of the business
cycle also rising this month.
'The rise in the EUR is a sign of the success of the
European Central Bank on the credit front, which matters far
more than a short term rise in EURUSD. Money is flowing into
Europe and from North back to the South or from ECB funding to
money market funding,' Sebastien Galy, strategist at Societe
Generale, said in a note to clients.
A weaker dollar as a result of expectations that the Fed's
loose monetary policy will stay intact for a long time
underpinned gold, lifting it as much as 1.1 percent to a
one-week high of $1,683.39 an ounce on Wednesday. Spot gold steadied around $1,676.71 early on Thursday.
The dollar maintained its advantage against the yen, with
expectations that the Bank of Japan will unveil drastically
accommodative monetary policy in coming months firmly capping
10-year Japanese government bond yields below 0.8
percent. In contrast, the benchmark 10-year U.S. Treasury yield has inched up to around 2.00 percent.
The dollar was at 90.99 yen after reaching 91.41 yen
on Wednesday, its highest since June 2010. The euro traded at
123.43 yen, not far from Wednesday's high of 123.87,
its loftiest since May 2010.
U.S. crude futures was up 0.1 percent to $98 a barrel
early on Thursday. Brent crude hit a three-month high on
Wednesday as Europe's economic data spurred optimism about the
global economy, overshadowing weak U.S. GDP.
(Additional reporting by Dominic Lau in Tokyo; Editing by
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Keywords: MARKETS GLOBAL/
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