* Japanese plan to buy euro bonds lifts euro briefly
* Gold consolidates gains on euro zone fears
* Japan's Nikkei stock index slips 0.2 percent
By Nick Macfie
SINGAPORE, Jan 11 (Reuters) - The euro jumped briefly on
Tuesday after Japan said it would buy euro bonds to boost
confidence in the European Financial Stability Facility amid
fears that Portugal may become the next euro zone member to
seek a bailout.
Japanese Finance Minister Yoshihiko Noda said Tokyo would
buy about 20 percent of bonds the euro zone plans to jointly
issue later this month. []
The euro rose as high as $1.2992 on trading
platform EBS from around $1.2925 in early Asian trade, but
quickly pared its gains after Japan said it would buy the euro
bonds using its existing forex reserves, not with new currency
purchases.
The single currency stood around $1.2955 at 0220 GMT, off
the day's low but little changed form late levels in New York.
"We see a further escalation in the European debt crisis,
and a substantially weaker euro," said Stephen Jen, managing
director of macroeconomics and currencies at BlueGold Capital
Management LLP in London, on Monday.
"There is no silver bullet because the underlying problems
are 'knotted'."
Tokyo's benchmark Nikkei index slid 0.23 percent
on worries about the euro zone and overnight weakness on Wall
Street, after hitting an eight-month closing high on Friday.
Tokyo markets were closed on Monday for a public holiday. The
broader Topix index was slightly higher.
The MSCI index of Asia Pacific stocks ex-Japan
was off 0.14 percent. Shares in Hong Kong,
Taiwan and New Zealand were slightly higher.
Gold was steady on Tuesday while anxiety about Portugal's
debt lingered, maintaining bullion's appeal as a safety net. A
softer dollar typically helps gold because it makes the metal
more affordable for holders of the euro and other currencies.
Spot gold gained 20 cents to $1,374.60 an ounce.
Portugal is widely seen by investors as next in line in the
euro zone to need a bailout after Greece and Ireland, but the
government has repeatedly denied that it will seek foreign
financing.
The European Central Bank threw Lisbon a temporary
lifeline on Monday by buying some of its bonds, traders said.
[]
The Dow Jones industrial average lost 0.3 percent
on Monday, while the Standard & Poor's 500 Index edged
down 0.1 percent. The Nasdaq Composite Index gained
0.2 percent.
U.S. crude prices climbed further above $89 on Tuesday as
a key Alaskan oil pipeline remained shut, cutting total crude
output by nearly 12 percent in the world's largest oil user.
(Editing by Kim Coghill)
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