By Alex Richardson
SINGAPORE, Dec 29 (Reuters) - Japanese stocks crept higher
on Wednesday as investors hunted bargains in one of the
developed world's cheapest markets, but Australia's main index
fell as bad weather hit shares in mining heavyweights.
The dollar was steady after an erratic previous session
that saw it touch a six-month low below 82 yen and
rebound sharply from a record low against the Swiss franc
.
A weaker dollar had lifted demand for commodities priced
in the U.S. currency, and London Metal Exchange copper
rose to a record $9,437.50 a tonne on Wednesday, boosted also
by a stoppage at a key port in major producer Chile.
Copper's strength failed to support mining giants Rio
Tinto and BHP Billiton , which both fell more
than 1 percent as heavy rain disrupted mining and shipping
operations. China's Christmas Day interest rate rise also
prompted investors to fret about weaker demand for industrial
metals, but analysts said the impact was likely to be
short-lived.
"The Chinese rate rise was key but it appears it is more
about curbing inflation and demand for base metals will not
fall sharply," said Ben Potter, research analyst at IG Markets.
Tokyo's Nikkei rose 0.2 percent, despite the
stronger yen that hurt some big exporters such as Canon Inc
. The Nikkei has climbed more than 12 percent since
early November, although it is down 2 percent for the year.
With shares trading around 1.1 times book value, Japan
remains one of the cheapest developed markets after debt-hit
Ireland, Greece and Italy.
MSCI's broadest index of Asia Pacific shares outside Japan
was also up 0.2 percent and has risen more
than 13 percent this year. Australia's benchmark
bucked the regional trend, falling 0.4 percent as the big
miners weighed.
DOWNBEAT DATA
U.S. shares eked out gains on Tuesday on strength in oil
majors such as Chevron and Exxon Mobil ,
although downbeat consumer confidence data kept gains in
check. The Dow Jones industrial average gained 0.2
percent and the broader S&P 500 was up 0.1 percent.
Foreign exchange trading was typically choppy in thin
year-end trade, when light volumes can cause exaggerated moves
from modest flows of funds.
A spike in U.S. Treasury yields boosted the allure of the
U.S. currency, with the dollar index , which measures
its performance against a basket of major currencies, steady
around 80.3, off an overnight low of 79.596.
The dollar bought 82.30 yen, and the euro stood at
$1.3125, retreating from a two-week high around $1.3274 the
previous day.
The slide in U.S. Treasuries prompted a similar retreat
for Japanese government bonds, with March 10-year futures
<2JGBv1> down 0.29 point and the 10-year yield up 3.5 basis
points.
Oil eased a little on forecasts of warmer weather in the
blizzard-hit northeastern United States, the world's biggest
heating oil market. Benchmark U.S. crude futures fell 10 cents
to $91.39 a barrel.
