* Dollar capped as Fed signals more stimulus possible
* U.S. Treasury yields ease across the curve
* Asian stocks excluding Japan extend gains
(Adds European open)
By Ian Chua
SYDNEY, Dec 6 (Reuters) - Asian shares rose to a
three-week high on Monday as the head of the U.S. Federal
Reserve suggested its injection of cash into the economy could
exceed the planned $600 billion, overshadowing weak U.S. jobs
data late last week.
European shares followed the firmer tone of Asia as
investors bet that the chances for a global recovery had
increased following the comments from Federal Reserve Chairman
Ben Bernanke. The FTSEurofirst 300 index of top European
shares climbed 0.4 percent in early dealings.
"Markets have a clear message from the policymakers that
they are in the business to ensure a sustained recovery," said
Mike Lenhoff, chief strategist at Brewin Dolphin. "That is
good news for the markets."
The prospect that the U.S. central bank could boost its
bond buying supported U.S. Treasuries and undermined the
dollar, which in turn boosted the attractiveness of some
commodities, such as oil.
Bernanke's comments came after data on Friday showed a
paltry 39,000 increase in U.S. non-farm payrolls and an
unexpected rise in the jobless rate to a seven-month high of
9.8 percent.
Bernanke said the central bank could increase its bond
buying if the economy fails to respond to stimulus efforts or
if unemployment stays too high.
Greg Gibbs, strategist at RBS, said the prospect of
persistent quantitative policy measures by the major economies
was likely to overpower other key developments, such as
tighter policy settings in China.
"It appears that the main underlying trends in the market
have been reinforced and funds will continue to flow strongly
towards Asia and commodities will remain well bid," he said.
MSCI's gauge of Asian stocks excluding Japan
rose to highs not seen since Nov. 15. It was
last up 0.4 percent at 467.87, extending last week's 3.9
percent rally.
Hong Kong's Hang Seng index gained 0.3 percent,
India's SENSEX rose 0.9 percent and Singapore's
Straits Times Index put on 0.9 percent.
"Talk that the U.S. Federal Reserve doesn't rule out
further quantitative easing is helping to keep the markets
buoyant, despite the poor jobs data that came out on Friday,"
said Carey Wong, an investment analyst at OCBC Investment
Research.
In Australia, investors snapped up shares in
Africa-focused miner Riversdale Mining after global
miner Rio Tinto made a $3.5 billion bid approach.
Riversdale shares surged 16 percent.
However, Japan's Nikkei average , which has
outperformed most other major markets in the past month, ended
a shade lower.
Exporters such as Canon Inc came under pressure
as the dollar wallowed near two-week lows against the yen.
DOLLAR CAPPED
The dollar bought 82.83 yen , not far off a two-week
low of 82.51 yen set Friday.
It edged down against a basket of major currencies ,
extending a fall of 1.4 percent last week.
The euro, however, slipped back below $1.34 on
persistent worries that Ireland's debt crisis would spread to
other high deficit euro zone members, such as Portugal and
Spain.
The region's finance ministers, meeting later on Monday,
face pressure to increase the size of a 750 billion euro
safety net for crisis-hit members in order to halt contagion
in the single currency bloc. []
U.S. Treasury bond yields eased across the curve, with the
10-year slipping 4 basis points to 2.96 percent.
German government bonds also rose off the back of firmer
Treasuries, although the European market's main focus was
firmly set on the euro debt woes.
Copper , which produced its biggest weekly gain in
four months last week, drifted up 0.6 percent to $8,781 a
tonne, close to a record $8,966 reached on Nov. 11.
U.S. crude futures <CLc1> rose 0.6 percent to $89.69 a
barrel, having reached a two-year high at $89.76 earlier.
Gold was little changed at $1,416 an ounce, but was
close to a record high around $1,424 set last month.
(Additional reporting by Charmian Kok in Singapore; Editing
by Neil Fullick)
