By Naomi Tajitsu
TOKYO, Feb 7 (Reuters) - Japanese shares recouped early
losses on Thursday in holiday-thinned Asian trade after a
securities house issued a "buy" rating on telecom group
Softbank Corp, but regional exporters and banks remained under
pressure as fears grew that the U.S. economy was sliding into
recession.
European shares also rose in early trade after Deutsche
Bank, Germany's largest bank, stood by its promise not to
spring any more subprime-mortgage related surprises on
investors. The FSEurofirst 300 <> index of top European
shares was up 0.6 percent by 0700 GMT.
Supply problems in South Africa kept platinum <XPT=> near a
record high $1,819 an ounce hit earlier this week, while oil
hovered around $87 a barrel, within range of its lowest since
October on signs of weaker demand in the United States, the
world's top energy consumer.
Lunar New Year holidays brought trading in much of Asia to
a halt, with markets in China, Hong Kong, South Korea, Taiwan,
Singapore, Malaysia and Indonesia closed until next week.
News that Deutsche Securities had initiated coverage of
Softbank with a "buy" rating pushed shares of the telecom and
Internet firm up 6.2 percent, making it the top positive
contributor to the benchmark Nikkei 225 <>.
The Nikkei finished 0.8 percent higher, clawing back from a
slide triggered by losses in U.S. markets and worries about
Japanese firms cutting their profit forecasts as U.S. consumers
spend less.
Tokyo shares recovered after dropping more than 4 percent
on Wednesday, but concerns about the impact of a possible U.S.
recession on the Japanese economy kept prices within reach of a
2 1/2-year trough touched l!st month.
Katsuhiko Kodama, senior strategist at Toyo Securities in
Tokyo, said investors scooped up shares after the Nikkei broke
below 13,000 points, but added that further gains may be
difficult.
"First and foremost, the problems in the United States must
be solved," Kodama said.
Australian shares <> ended 0.2 percent lower, dragged
down as Westpac Banking Corp <WBC.AX> fell 3 percent in
sympathy with weaker U.S. stocks, although prices pulled back
from early lows.
Top miner BHP Billiton ended 0.7 percent higher, staging a
last-minute rally from early losses after Rio Tinto Ltd
<RIO.AX> rejected its $147 billion hostile takeover bid, the
second biggest in corporate history.
FOREX TRADE AWAITS RATE DECISIONS
The dollar held steady against the yen <JPY=> at around
106.50 yen, and was supported versus the euro <EUR=> at around
$1.4620 ahead of interest rate rate announcements by the
European Central Bank and Bank of England later on Thursday.
The ECB is widely expected to hold interest rates at 4
percent, and investor focus is likely to be on whether the ECB
would keep its vigilance on inflation risks even as signs show
that economic growth in the region may be slowing.
Koji Fukaya, senior currency strategist at Deutsche Bank in
Tokyo, said that any cautious comments on the growth outlook
from ECB President Jean-Claude Trichet may boost stocks, while
stinging the euro.
"Market participants, especially on the equities side, are
hoping for dovish comments," he said.
The Bank of England, meanwhile, looked set to cut interest
rates to head off a sharp consumer-led slowdown as storm clouds
continue to gather over the global economy.
While Britain has yet to suffer the type of sharp slowdown
seen in the United States, the housing market is teetering and
evidence that the global credit crunch is spilling into the
broader economy is stacking up.
U.S. Federal Reserve officials warned on Wednesday that the
central bank could not drop its guard on fighting inflation,
while also expressing concern about a possible U.S. recession.
The remarks on inflation cast doubt on the outlook for more
U.S. interest rates cuts, sending U.S. shares lower.
Japanese government bonds slipped, pushing up the benchmark
10-year yield <JP10YTN=JBTC> 1.5 basis points to 1.420 percent.
But losses were limited as concerns about the U.S. economy
and problems in the bond insurer sector meant there was still
good demand for less risky government debt.
Gold <XAU=> hovered around $905, recovering from a slide
under $900.
(Editing by Kim Coghill)
