* Investors hunt for new growth drivers as recovery priced
in
* Shanghai stocks jump 2.2 pct, positive on week
* U.S. crude fails to hurdle $75, hovers at $72
* Yen, dollar slip
By Kevin Plumberg
HONG KONG, Aug 26 (Reuters) - Japanese stocks rose to a
10-month high on Wednesday, driven by a modest shift into
defensive sectors, while stocks in Shanghai turned positive on
the week as investors cheered corporate results.
Thin summer trading volumes, however, kept prices choppy
and markets generally remained in ranges.
Major European stock futures were down 0.2 percent <STXEc1>
after the cash market closed at the highest since early
October, while U.S. stocks futures were up 0.4 percent <SPc1>,
set to extend gains after U.S. single-family home prices grew
for a second straight month.
The Ifo survey of German business sentiment is expected to
show an across the board pickup later on Wednesday, playing
into the story that recoveries are taking hold around the
world.
"There's no mistake that the economy is on a recovery track
from both the macro and micro perspective, and the market is in
an upward trend," said Junichi Misawa, senior fund manager at
STB Asset Management in Tokyo.
Still, having already priced in an upturn in the global
economy, investors were looking for more signs that growth can
be sustained once the impact of massive government stimulus
spending fades.
Volatility in Chinese shares has also kept investors
guessing. The Shanghai composite index <> rose 2.3 percent
on Wednesday but has still lost around 13 percent so far in
August, on track for its biggest monthly decline since the
darkest month of the financial crisis in October 2008.
The precipitous move has triggered questions on whether
other high flying equity markets were due for a correction.
Japan's Nikkei share average closed up 1.4 percent <>,
at the highest since October 3.
Shares of index heavyweight Toyota Motor Corp <7203.T> rose
1.5 percent on a report the carmaker would cut global
production capacity and post an operating profit in the 2010
financial year. []
However, while news of the capacity cut shored up the
stock, it also reinforced worries about persistent weakness in
global consumer demand, which is key to a solid recovery.
Japan's exports slipped in July as annual declines in
exports to the United States and China accelerated, a sign that
the impact of stimulus measures in major economies worldwide
may be starting to wane. []
"Things have stopped getting worse, but a return to trend
gains in production and trade is a pipe-dream," Patrick
Bennett, Asia foreign exchange and rates strategist with
Societe Generale in Hong Kong, said in a note.
Traders will be watching U.S. durable goods orders and new
home sale data later on Wednesday for more clues on whether
consumers are ready to start spending again.
SHANGHAI STOCKS JUMP 2 PCT
The MSCI index of Asia Pacific stocks traded outside Japan
rose 0.3 percent <.MIAPJ0000PUS>. Weakness in the technology
and consumer discretionary sectors -- two of the most expensive
segments of the Asian market -- kept the broader market in
check.
Hong Kong's Hang Seng index <> was up 0.5 percent but
remained susceptible to ups and downs in the Shanghai market.
U.S. oil futures for October delivery <CLc1> were largely
unchanged on the day around $72 after a 3 percent drop
overnight on profit taking after the market was unable to push
crude above $75 a barrel. Brent was also steady at $71.81
<LCOc1>.
Inventory data from the American Petroleum Institute late
on Tuesday showed a big buildup in U.S. crude oil stocks last
week, keeping a lid on the market.
Still, that appeared to be only a short-term setback.
Analysts raised their 2010 median price forecast for a fifth
straight month to $73.39. []
The Australian dollar inched up 0.4 percent to US$0.8357
<AUD=> and has been less reactive this week to Chinese stock
market moves. Earlier in August, sudden drops in the Shanghai
market sucked the Australian currency down with it.
The ICE Futures U.S. dollar index <.DXY>, which gauges its
value against a basket of six other major currencies, was
steady on the day and hardly changed in August.
Investors are eager to know if the dollar will resume a
downward trend in September, as more dealers return from
holiday and trading volumes pick up.
(Additional reporting by Aiko Hayashi in TOKYO)
(Editing by Kim Coghill)
