* Commodity sector boosts Asia stocks to 2-year high
* Japan's Nikkei up 2 pct after yen selloff overnight
* Asia braces for more capital inflows post Fed
By Kevin Plumberg
HONG KONG, Nov 4 (Reuters) - Japanese stocks rallied 2
percent on Thursday after the Federal Reserve's new bond buying
programme was close enough to expectations to keep investors
selling yen and searching for higher-yielding assets.
For more on the Fed's latest push to bolster the U.S.
recovery, click []
After falling overnight, the U.S. dollar stabilised, with
dealers hesitant to add to sizable bets against the currency
after the euro touched a 10-month high, though traders pushed
up copper and oil prices anyway.
Asian stocks edged up to a two-year high in the wake of the
Fed decision, mainly because of buying in the resources sector,
though reaction overall was muted.
There also was still a plethora of events left this week
that could inject volatility in asset markets, including policy
meetings of the Bank of England, Bank of Japan and European
Central Bank as well as the October U.S. payrolls report.
For Asia, after the Fed pledged to buy $600 billion of
mostly mid-maturity Treasury debt, increased capital flows into
the region will probably accelerate a process of reflation but
also heighten the risk of more stringent capital controls.
"By undertaking more Treasury bond purchases, the hope is
that risk appetite will provide the catalyst for people to
spend, particularly corporates," Sean Darby, Asia strategist
with Nomura in Hong Kong, said in a note.
"We expect Asian equities to remain well bid but the
additional QE will raise the spectre of capital controls in
ASEAN and parts of North Asia."
* Japan's Nikkei share average was up 1.9 percent <>,
with shares of big exporters among the biggest lifts to the
index after the yen sold off overnight.
* The MSCI index of Asia Pacific shares outside Japan edged
up 0.4 percent <.MIAPJ0000PUS> to the highest since June 2008.
Commodity-related stocks were early winners in Asia after the
Fed decision.
* The euro was at $1.4110 <EUR=>, basically flat on the day
after hitting $1.4175 on Wednesday.
* The dollar was up slightly against the yen at 81.14 yen
<JPY=>, on pace for a fourth day of gains.
* Dealers were quickly finding other themes to trade after
the Fed. The U.S. dollar was up 0.4 percent against the
Canadian dollar at C$1.0092 after the Canadian government
surprised markets with a decision to block BHP Billiton's $39
billion bid for Potash Corp <POT.TO>. []
* 10-year U.S. Treasury futures rose 0.5 percent to a
one-month high, while in the cash market, 5-year Treasury
yields slipped 3 basis points to 1.08 percent, with 43 percent
of the Fed's new plans for bond buying falling between 4 and 7
year maturities.
* Three-month copper traded on the London Metal Exchange was
up 1 percent to $8,399.75 a tonne <CMCU3>, creeping back toward
a two-year high reached last week Tuesday.
(Editing by Jonathan Thatcher)
