By Tom Miles
HONG KONG, April 30 (Reuters) - Asian investors braced for
a U.S. interest rate decision on Wednesday but kept an eye out
for stocks with robust earnings prospects, such as Japanese
flat-panel TV maker Matsushita, which leapt 11.5 percent.
The U.S. Federal Reserve, which is widely expected announce
another rate cut later, could also signal that its cutting
cycle is done for now.
That could trouble firms counting on an even cheaper cost
of debt but it could also draw a line under the financial
crisis, since the Fed's rush to slash rates has reflected
widespread panic about the fragile health of the U.S. economy.
Although trading was muted ahead of the Fed, Matsushita
Electric Industrial Co <6752.T>, the world's No.1 plasma TV
maker, which posted a 15 percent rise in quarterly operating
profit and forecast a larger-than-expected gain this year,
triggering analyst upgrades.
"If you look around the world, it's not all doom and gloom,
and the Beijing Olympic Games, which are the biggest business
chance for us, are coming up," said Matsushita President Fumio
Ohtsubo.
"I am fully aware of tough business conditions. But we
don't need to be overwhelmed by them."
The stock's rise helped cushion the Nikkei average index's
<> 0.1 percent fall. Shares across the rest of Asia
<.MIAPJ0000PUS> were flat at 0337 GMT.
Australia's benchmark S&P/ASX 200 index <> slipped 0.2
percent, but got support from two deals in the resources
sector, which has boomed as Asian demand outpaces supply of
energy and materials.
Electricity retailer Origin Energy Ltd <ORG.AX> rocketed
36.5 percent after it received a A$13 billion ($12.1 billion)
takeover proposal from British utility BG Group Plc <BG.L> at a
40.4 percent premium to its closing price on Tuesday
[].
And Midwest Corp Ltd <MIS.AX> rose 2.8 percent to A$6.27
after recommending a revised A$1.36 billion ($1.27 billion)
offer from Chinese iron ore trader Sinosteel [].
OIL SKIDS
The Fed is expected to trim rates by a quarter percentage
point to 2 percent, which would take its total rate cuts over
the past seven months to 3.25 percentage points, but may also
signal that its cutting cycle is done for now. []
The potential bottoming-out of the U.S. rate cycle, coupled
with rising inflationary concerns globally, caused a slump in
bond prices last week as investors suddenly changed their view
of the future path of interest rates.
But bleak U.S. consumer confidence and housing sector
[] data revived investors' appetite for U.S.
Treasuries [] on Tuesday, and Japanese government bonds
[] followed suit on Wednesday, taking additional support
from a weaker-than-expected reading on Japanese industrial
production.
"It seems like the pullback in JGBs that took place on
Monday and last Friday may be over," said Mari Iwashita, a
senior strategist in Daiwa Securities SMBC's fixed-income
research department.
June 10-year JGB futures rose 0.33 point to 135.93 <2JGBv1>
in light trade ahead of Japanese holidays early next week.
The prospect of a halt to interest rate cutting has put the
brakes on the sliding dollar, which held steady in Asian trade
on Wednesday after rising against the euro <EUR=> on Tuesday.
The latest dollar surge helped knock U.S. crude oil <CLc1>
back to $115.53 a barrel from last week's high close to $120,
but it had little impact on Asian stocks because despite the
dollar's strong showing against the euro <EUR=> it barely
ruffled the yen <JPY=>, Asia's touchstone currency.
The dollar was steady around 104.1 yen and the euro stood
at around $1.557 by 0140 GMT, extending its fall from a record
$1.6018 reached last week.
(Additional reporting by Masayuki Kitano and Eric Burroughs in
TOKYO; Editing by Louise Heavens)
