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* MSCI Asia-ex Japan hits 10-mth peak, up 0.4 pct
* Bernanke: policy accommodation needed for "extended
period"
* Dollar steady after slide, Aussie dips but near 5-wk high
* Nikkei up 2.7 pct after holiday, Aug. 30 election eyed
By Eric Burroughs
HONG KONG, July 21 (Reuters) - Asian edged up to another
10-month peak on Tuesday after strong company earnings
reassured investors that a U.S. economic recovery is taking
root, prompting a further shift into riskier assets from the
safe-haven dollar.
European markets were set to open higher, with futures on
the Dow Jones Eurostoxx 50 <STXEc1> up 0.4 percent.
Gains were kept in check as some market players booked
profits on the run-up in equities and higher-yielding
currencies, knocking the Australian dollar down from a
five-week high against the U.S. currency.
Central bankers are starting to sound a note of optimism as
well. Minutes from the Reserve Bank of Australia's last meeting
in July showed it had become more optimistic about the economic
outlook at home and abroad. []
But Federal Reserve Chairman Ben Bernanke reassured that
loose monetary policy with interest rates near zero would be
around for a while longer.
Writing in the Wall Street Journal, Bernanke said the Fed's
accommodative policy would be warranted for an extended period
even while laying out a roadmap for how the Fed could mop up
the massive reserves injected into the financial system.
ID:nHKG104311]
Bernanke delivers his twice-yearly testimony to Congress
later in the day.
"It doesn't look like he's sounding too anxious or urgent
about removing excess stimulus from the system," said Sue
Trinh, a senior currency strategist at RBC Capital Markets in
Sydney.
Stocks around the world have gained this month as major
banks show more signs of healing from the credit crisis and
companies are more confident about demand improving later this
year and in 2010.
Analysts said the last-minute deal by CIT Group <CIT.N> to
secure emergency financing also boosted investor confidence,
even as the drama surrounding the struggling U.S. commercial
lender has made few waves across markets.
"News of the CIT deal and positive economic data from the
United States helped markets start off quite strong," said Lee
Sun-yeop, a market analyst at Goodmorning Shinhan Securities in
Seoul. "Combined with a positive earnings outlook and growing
upward momentum, we are seeing shares hitting a new high for
the year."
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> edged up 0.4 percent after pushing up to 344.65
in early trade, the highest since late September when equity
markets were crumbling after the collapse of U.S. investment
bank Lehman Brothers.
So far this year the MSCI benchmark for Asia has risen 39
percent, rebounding from a record 53 percent plunge last year
and outperforming developed markets.
Equity indexes were mostly higher across the region. Hong
Kong's Hang Seng <> inching up 0.2 percent and South
Korea's KOSPI <> adding 0.7 percent, but the Shanghai
Composite <> lost 0.7 percent.
On Monday the U.S. S&P 500 <.SPX> climbed 1.1 percent,
while brokerage upgrades of technology bellwethers lifted the
Nasdaq <> to a ninth straight daily gain -- the longest
winning streak since 1998.
Japan's Nikkei average <> rose 2.6 percent, getting a
lift from the renewed optimism on the economic outlook as the
market reopened after a three-day weekend.
In an expected move, Prime Minister Taro Aso dissolved the
lower house of parliament and called for an election on Aug.
30. The opposition Democratic Party leads in the polls and is
threatening to end a half-century of near-unbroken rule by the
Liberal Democratic Party. []
The dollar steadied after hitting a six-week low against a
basket of major currencies, beaten down as investors have
favoured emerging market stocks and bonds over the safety of
the U.S. currency.
The dollar index, a gauge of its performance against six
major currencies, was little changed at 78.95 <.DXY>. The euro
was also steady at $1.4210 <EUR=> after shooting higher the
previous day. The dollar dipped 0.2 percent to 94.05 yen
<JPY=>.
The euro is now poised to make a run at its peaks hit in
May around $1.4335, which form a double-top on the charts and
should prove tough resistance.
The Australian dollar showed little reaction to RBA meeting
minutes but succumbed to profit-taking, losing 0.4 percent to
$0.8126 <AUD=D4>.
Bonds were under pressure again as stocks kept adding to
gains. The benchmark 10-year Japanese government bond yield
<JP10YTN=JBTC> rose 4.5 basis points to 1.360 percent, a
three-week high.
Treasuries were little changed, keeping the benchmark
10-year yield <US10YT=RR> at 3.599 percent and near a one-month
high of 3.722 percent hit on Monday.
(Additional reporting by Jungyoun Park in Seoul, Charlotte
Cooper and Elaine Lies in Tokyo)
