* Reuters Tankan shows corporate Japan mood darkens
* Markets expect China to raise rates again within days
* Euro vulnerable, Irish budget next major market event
By Daniel Magnowski
SINGAPORE, Dec 7 (Reuters) - Asian stocks got a tentative
boost on Tuesday from U.S. President Barack Obama's compromise
deal to extend all Bush-era tax cuts, while the euro ticked up
but remained vulnerable to debt-related pressure.
Leading European shares rose 0.2 percent in early
trade, though investors were wary of the possibility of an
imminent Chinese interest rate rise, possibly as early as this
weekend.
Stock markets in Hong Kong , Shanghai and
South Korea closed higher, and MSCI's gauge of Asian
stocks excluding Japan rose 0.5 percent,
taking its gains for the year to more than 12 percent versus
7.5 percent for the MSCI world index .
"Today's market is driven largely by expectations of more
quantitative easing measures by the United States," said
Shinhan Investment Corp analyst Lee Sun-yeb in Seoul.
After meeting Democratic leaders at the White House on
Monday, Obama announced a "framework" agreement with
Republicans that would renew tax cuts not just for the middle
class -- as he and fellow Democrats had sought -- but also for
wealthier Americans, as Republicans wanted. []
Extending all the tax cuts for two years would cost $501
billion, according to the congressional budget office, adding
that renewing the rates will boost the economy in the short
term, but be harmful in the long term.
Asia has been one of the chief beneficiaries of flows of
capital from the United States, where the Federal Reserve is
pursuing a policy of printing more cash.
In Japan, the benchmark Nikkei average was dragged
down by the strength of the yen, and a Reuters poll showed the
mood among Japanese manufacturers darkened in late November
and is expected to grow even gloomier in the coming months as
a strong yen and the global slowdown eat into
profits.[]
"The impact of a strong yen, slowing exports and declines
in profits weighed on corporate sentiment and companies are
growing more cautious about the outlook," said Yoshimasa
Maruyama, an analyst at Itochu Corp.
The Nikkei closed 0.26 percent lower, though Sumitomo Corp
and Mitsubishi Corp outperformed the broader
index on reports they are making moves to expand their rare
earths businesses. Non-Chinese sources of the hi-tech minerals
are much in demand, on worries the world's biggest supplier
may in future restrict exports. []
But adding to the generally cautious tone in Asian
financial markets was the belief that the cost of borrowing in
China will soon rise.
China's central bank may raise rates again this weekend as
it tries to contain inflationary pressures, official newspaper
the China Securities Journal reported on Tuesday.[]
Another newspaper said Chinese bank lending had exceeded
by the end of November the government's full-year loan target
of 7.5 trillion yuan ($1.13 trillion), supporting arguments in
favour of further credit tightening.
DEBT WORRIES DOG EURO, BOOST GOLD
The euro slipped in early trade before recovering to
$1.3320, just above its late levels in New York on Monday,
with support seen at $1.3268.
The next major market event will be the outcome of the
Irish budget, due later on Tuesday, traders said. The deeply
unpopular government is set to unveil a record austerity plan
that will inflict more pain on voters. []
"If the (Irish) parliament fails to approve proposals, we
could see a fresh flare-up in euro zone tensions and the euro
could fall sharply against major forex counterparts," said
David Rodriguez, strategist at DailyFX.
Ireland last month received an 85 billion euro bailout
from the International Monetary Fund and European Union, and
markets are wondering if Portugal and Spain will be the next
ones in need of rescue.
Euro zone finance ministers met on Monday amid pressure to
increase the size of a 750 billion euro safety net for
debt-stricken members, but Germany rejected such a move and
also dismissed a call for joint euro bonds guaranteed by all
governments.
U.S. consumer confidence data for October was due for
release at 1500 GMT.
Gold traded at $1,420 per ounce, down slightly from
the previous session's $1,427. This is the most recent in a
series of peaks the precious metal has reached as investors
buy heavily, attracted by gold's perceived safety as a store
of value, in contrast to paper currencies. It has risen almost
one-third since the start of the year.
Gold priced in euros hit an all-time high of
1,073.03 euros on Tuesday, driven by persistent worries about
unsustainably high debt levels within the single currency zone.
U.S. crude oil futures <CLc1> slipped from the 26-month
high it touched in the previous session, trading around $88.80
on Tuesday, while benchmark industrial metal copper ,
which has moved closer in recent sessions to its record high
of almost $9,000 per tonne, changed hands for just below
$8,800.
(Additional reporting by Ian Chua in Sydney and Izumi
Nakagawa in Tokyo; Editing by Miral Fahmy)
