* Nikkei pressured by firmer yen, other Asian markets rise
* Copper sets record high, Aussie dollar at new 28-year peak
* Many Asian markets shut on Friday for holidays
(Updates throughout)
By Ian Chua
SYDNEY, Dec 30 (Reuters) - Japanese stocks ended the year
with a whimper on Thursday as a stronger yen knocked shares of
major exporters lower, but markets elsewhere in Asia rose,
cementing solid gains for 2010 led by a near 50 percent rally
for Indonesia.
Going from strength to strength, copper scaled a fresh
peak at $9,540.75 a tonne , while U.S. crude oil <CLc1>
held within a whisker of a 2-year high near $92 a barrel,
reflecting growing optimism for global growth.
For now, investors seemed to be cheering prospects for a
stronger U.S. recovery in 2011 and ongoing strength in Asia,
while shrugging off the risk of more interest rate hikes in
emerging economies like China as they deal with inflation and
any flare up of the euro zone sovereign debt crisis.
A private survey on Thursday showed China's vast
manufacturing sector continued to expand strongly towards the
year-end, albeit at a slightly slower pace than in November.
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Overall, analysts believe 2011 will be another positive
year for equities, particularly as ultra-low interest rates in
major economies mean there will be plenty of cash looking for
better returns.
"While GFC (global financial crisis) aftershocks will
continue to cause volatility and shares are becoming
vulnerable to a short term correction in January after several
months of very strong gains, shares are likely to put in good
gains through 2011 as a whole," said Shane Oliver, head of
investment strategist at AMP Capital Markets.
MSCI's index of Asia Pacific stocks excluding Japan
rose 0.6 percent, and was up almost 15 percent
this year.
This compared with a rise of 10 percent for the MSCI World
stock index , 13.5 percent for the MSCI America
index and a paltry 1.3 percent for European
stocks .
South Korea's KOSPI rose 0.4 percent, closing the
year some 22 percent higher, while Indonesia's IDX Composite
index , the region's star performer, advanced 0.4
percent on Thursday, chalking up a whopping 47 percent for
this year.
In contrast, Japan's Nikkei fell 1.1 percent as
investors sold some of the major exporters like Toyota Motor
on a firmer yen. The index ended the year down about
3 percent, making it one of the worst performers in the region.
"The recent advance of the yen has been a bit unexpected
and
clearly having a negative psychological impact on share
prices,"
said Takashi Ohba, a senior strategist at Okasan Securities.
Market participants, however, believe Japanese stocks are
undervalued compared with other developed markets, suggesting
scope for the laggard to make up some lost ground in 2011.
Many Asian markets including Japan, South Korea, Thailand,
Indonesia, the Philippines and Malaysia will be shut on
Friday, while others like Australia will have half-day sessions.
DOLLAR WILTS
The yen rose to highs not seen since Nov. 9 as the dollar
fell across the board after traders took a steep decline in
U.S. Treasury yields overnight as a signal to sell the
greenback.
Analysts warned thin year-end conditions made for
exaggerated moves, although some believed there could be more
dollar weakness ahead.
"Some market players may be building up positions for the
next year. As the Federal Reserve is expected to keep printing
dollars, the dollar looks set to cheapen next year," said
Tsutomu Soma, manager of foreign securities at Okasan
Securities.
The dollar hit a seven-week low around 81.30 yen ,
and plumbed a 28-year low versus the Australian dollar, which
rose to a high just shy of $1.02 . The euro climbed to
$1.3259 , extending Wednesday's rebound from a low
around $1.3081.
China's yuan hit a record high against the dollar after
the People's Bank of China set a higher mid-point, sparking
expectation of more yuan appreciation in the first quarter of
2011.
The U.S. 10-year yield last traded at 3.339
percent, reversing a spike to around 3.5 percent earlier in
the week after an auction of seven-year notes on Wednesday
drew decent demand.
(Additional reporting by Chikafumi Hodo and Hideyuki Sano in
Tokyo)
