* US 10 yield at 7-month high on signs of improved growth
* Dollar firms on upbeat U.S. data, Aussie back at parity
* Asia stocks slip, however, as Fed remains cautious
By Ronald Popeski
SINGAPORE, Dec 15 (Reuters) - Yields on U.S. Treasuries
climbed to seven-month highs in Asia on Wednesday and the
dollar rebounded as upbeat retail sales data added to evidence
that America's economy is gathering steam.
Stocks in Asia slid, however, after the Federal Reserve
said the recovery was still too slow to bring down stubbornly
high unemployment, and as investors continued to book profits
from a long autumn rally before closing their books for
year-end.
Energy and resource shares were under particular pressure
as oil prices retreated and as investors switched out of big
Australian miners which have outperformed in recent sessions.
At its last policy meeting of the year, the Fed offered
only a cautious nod to improving prospects for the U.S.
Economy and reaffirmed its commitment to buy $600 billion in
bonds to stimulate growth, despite fears of some economists
that it could trigger inflation. []
"The U.S. Fed's statement strengthened the likelihood the
U.S. would continue its quantitative measure. Combined with a
good set of retail data, sentiment is still good," said Hong
Soon-pyo, a market analyst at Daishin Securities
Japan's Nikkei fell 0.2 percent while the MSCI
ex-Japan index of Asian stocks slid 0.6 percent, pressured by
a late-day selloff in U.S. markets overnight after the Fed's
assessment of the economy proved to be more sober than many
traders would have liked.
Highlighting the risks still facing the global recovery,
the Bank of Japan's tankan survey showed Japanese
manufacturers' business sentiment worsened for the first time
in nearly two years. In Europe, Spain saw a further spike in
borrowing costs and Standard and Poor's cut its outlook on
Belgian debt to negative as the euro zone's debt crisis
continued to fester.
TREASURY YIELDS EXTEND CLIMB
U.S. Treasury prices extended their recent losses as the
Fed showed no signs of curtailing its economic stimulus
measures.
The yield on 10-year Treasuries rose to just
above 3.5 percent, its highest level since mid-May, compared
with 3.28 percent late on Monday and 2.8 percent on Nov 30.
The benchmark notes are on track for their worst month since
April 2004.
The U.S. dollar index against a basket of other
major currencies rose 0.2 percent, having climbed off a
three-week low plumbed on Tuesday.
Oil prices eased 40 cents to $87.89 a barrel after the Fed
dampened expectations for a faster recovery, which is seen as
critical to reigniting oil demand in the world's largest
energy user.
Spot gold was little changed at $1,395.15 an ounce
but under some pressure from the firming dollar.
(Editing by Kim Coghill)
(Ronald.Popeski@ThomsonReuters.com +65 6870 3815)
