By Chikako Mogi
TOKYO, Feb 13 (Reuters) - Asian shares inched higher on
Wednesday while the yen was firmer amid conflicting
interpretations of G7 comments about the yen's recent weakness.
The MSCI's broadest index of Asia-Pacific shares outside
Japan rose 0.7 percent, pulled higher by
Australian shares which jumped 1 percent led by the
Commonwealth Bank of Australia, which posted record first half
China, Taiwan and Hong Kong markets remain closed for the
Lunar New Year holiday.
U.S. stocks closed modestly higher on Tuesday, putting the
Dow within striking distance of an all-time high.
Investors were likely to continue taking cues from currency
markets before the meeting in Moscow of the Group of 20 finance
ministers and central bankers on Friday and Saturday, with
growing international tensions over exchange rates.
At centre is Japan, where Prime Minister Shinzo Abe's
government has made it clear that it will push for aggressive
policies to beat stubborn deflation through drastic monetary
expansion. Anticipation of much bolder Bank of Japan monetary
policy has sent the yen into a steady decline, helping boost
Japanese stocks to 33-month highs.
'The Japanese stock market may have rallied too strongly on
expectations alone. I don't believe the Japanese government is
manipulating currency rates, but it is maybe time that an
equilibrium point may be sought for the yen's level given that
some other countries may see weaker currencies as beneficial to
their economies,' said Yuuki Sakurai, CEO at Fukoku Capital
Management in Tokyo.
The Nikkei stock average eased 0.2 percent.
The yen rallied on Tuesday, reversing the previous day's
late selloff against the dollar and euro after an official with
the Group of Seven said it is worried about excess moves in the
G7 governors and ministers reaffirmed their commitment that
fiscal and monetary policies would not be directed at devaluing
currencies, a statement meant to reassure investors that Tokyo
was not aiming to guide the yen lower with its aggressive
expansion of monetary policy.
Bank of Canada Governor Mark Carney said on Tuesday it was
critical that no G7 member use monetary policy to target
'All these comments are merely stating the obvious and are
not to be taken in the context of whether they are endorsing a
weaker yen or not,' said Yuji Saito, director of foreign
exchange at Credit Agricole in Tokyo, adding that Carney's
comments best describe the thinking of the G7.
'What is being said is that monetary policy should be used
to achieve domestic objectives and Japan is undertaking
reflationary policies, not manipulating currency rates, and the
result of that is a weak yen. What is asked for from Japan is to
explain its policy clearly at the G20,' Saito said.
The dollar was down 0.2 percent to 93.31 yen after
marking its highest level since May 2010 of 94.465 on Monday.
The euro eased 0.2 percent to 125.49 yen, moving
further away from its highest since April 2010 of 127.71 yen
touched last week.
The euro steadied around $1.3451, after rising on
comments made Tuesday by European Central Bank President Mario
Draghi, who said talk of a currency war was overdone, and that
Spain was on the right track toward economic recovery.
Markets were keeping their eye on President Barack Obama's
State of the Union address for any clues on a deal with
Republicans to avert automatic spending cuts due to take effect
March 1. The tone of the speech will also be scrutinized, with
any sign of compromise likely to be warmly received.
Obama was expected to challenge a divided Congress to back
his proposals to create jobs for the middle class.
U.S. crude was up 0.1 percent to $97.60 a barrel and
Brent was steady around $118.70.
(Editing by Eric Meijer)
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