* Nikkei jumps 2.4 pct on weaker yen, other Asian shares up
* Yen falls on expected European, U.S. policy tightening
* Asian stocks ex-Japan eke out quarterly gain
* Oil slips after data show ample U.S. supply, gold flat
By Richard Leong
March 30 (Reuters) - Asian stocks rallied on Wednesday as
investors snapped up riskier assets on attractive valuations,
while Japanese exporters were helped by the yen's weakness on
expectations of interest rate rises in Europe and the United
States.
Renewed demand for shares came despite concerns the global
economy could be hurt by Japan's struggle to contain the world's
worst nuclear crisis in decades, conflicts in Libya and the
Middle East and Europe's festering sovereign debt problems.
Concerns over those risks have eased, for now, with
expectations that stocks worldwide will move higher into the new
quarter, analysts and traders said.
"Global equities are stronger and it's risk-on again," a
trader at a U.S. investment bank said.
Japan's Nikkei index rose 2.4 percent in afternoon
trading, after two days of losses. So far in March, it has shed
8.8 percent, heading for its worst month since May 2010. Year to
date, the benchmark has fallen 5.3 percent.
Among individual stocks, Tokyo Electric Power was
the spotlight again, tumbling nearly 18 percent on concerns that
the operator of the quake-stricken nuclear reactors in
northeastern Japan may be nationalised.
Other Asian equities have recovered from their losses since
a devastating earthquake and tsunami hit northeast Japan on
March 11. MSCI's index of Asia-Pacific shares outside Japan
was up 1.5 percent on the day. It has risen 4.0
percent so far in March and up 0.6 percent this year.
MSCI's world index rose 0.3 percent, taking
its gains for the year so far to more than 3.1percent, with
weakness in Asia offset by strong gains early in the year in
major indexes in the United States and Europe as investors
rotated from emerging markets to large, developed ones.
The yen dipped to a 10-month low against the euro and neared
a three-week trough versus the dollar early in Asia, having
suffered broad losses after several chart support levels were
breached plus expectations of rising rates in Europe and United
States.
In recent days, several top U.S. central bank officials said
further bond purchases by the Federal Reserve were not needed to
support the economy, while European Central Bank President
Jean-Claude Trichet signaled his inflation concerns because of
rising food and energy prices.
SHIFT TO GRADUAL POLICY TIGHTENING
"We've had comments from the Fed and a shift in sentiment
towards the U.S. policy from a rate perspective that has really
pushed U.S.-Japan yield differentials, driving the dollar
higher," said Mitul Kotecha, head of global FX strategy at
Credit Agricole in Hong Kong.
The yield gap between two-year U.S. and Japanese government
debt has ballooned over the past 1-1/2 weeks to a tad more than
61 basis points, the widest since early February.
Two-year U.S. Treasury yields, which are most sensitive to
traders' views on changes in Fed policy, hovered at their
highest in six weeks at 0.83 percent on Wednesday, while
two-year JGB yields have bounced in a tight range of 0.18
percent to 0.25 percent so far this year.
Traders have been adjusting their books and most investors
have moved to the sidelines in advance of the last day of the
quarter and Japan's fiscal year. Light volume has heightened
intraday volatility across financial markets.
The dollar rose as high as 83.02 yen , well above the
76.25 all-time low, which it scaled in the week after the quake.
It last traded at 82.94.
The euro touched 116.95 yen after breaking
through major resistance around 115.50/60, a level that has
capped the pair since May 2010. It last traded about 116.73.
Among precious metals, gold turned up modestly, snapping a
four-session losing streak as hawkish central bank comments
reduced its appeal as an inflation hedge.
Spot gold traded at $1,417.70 an ounce, after being
as high as $1,419.50 earlier. This compared with $1,415.95 late
in New York on Tuesday. It is 2 percent below the record high of
$1,447.40 set on March 24.
U.S. oil prices fell as an expected rise in U.S. domestic
crude stocks offset worries over turmoil in Libya and the Middle
East.
Several OPEC producers have boosted output recently to make
up for supply disruptions in Libya, easing supply concerns.
U.S. crude <CLc1> fell 32 cents to $104.47 a barrel, while
Brent crude <LCOc1> declined 23 cents to $114.91.
(Reporting by Ian Chua in SYDNEY,; Natsuko Waki, Edwina Gibbs
and Antoni Slodkowski in TOKYO, Randy Fabi, Alejandro Barbajosa
and Lewa Pardomuan in SINGAPORE; Editing by Richard Borsuk)
