* Fed stance keeps risk appetite intact
* Dollar hits fresh three-year lows vs basket of currencies
* U.S. crude rises to 2-1/2 year peaks, gold at all-time
highs
* MSCI gauge of Asian stocks excluding Japan reach 3-yr peak
By Ian Chua
SYDNEY, April 28 (Reuters) - The dollar slumped to
three-year lows on Thursday, pushing U.S. crude to a 2-1/2 year
high, while Asian stocks rose as investors bet that the easy
U.S. monetary policy will continue to drive money to riskier
assets.
The Bank of Japan (BOJ) is also expected to maintain its
ultra-loose monetary policy later in the day and indicate its
readiness to ease further if damage from last month's earthquake
proves bigger than expected.
Putting pressure on the BOJ to do more, latest data showed
Japanese factory output fell at a record pace in March.
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With the two major central banks keeping interest rates near
zero, investors are set to continue using the dollar and yen as
funding currencies to buy higher-yielding assets, commodities
and equities.
"The reason for the dollar's broad weakness is that market
players think it makes sense to use the dollar to fund
investment in various assets, since U.S. interest rates are
likely to stay low for a while," said Daisuke Karakama, market
economist at Mizuho Corporate Bank in Tokyo.
Japan's Nikkei average rose 1.3 percent, while
stocks elsewhere in Asia put on more than 1
percent to hit a new three-year peak.
Trading volume in Japan's stock markets, however, is
expected to be thin as the Golden Week holidays loom and as
investors awaited earnings from the likes of Panasonic Corp
and Honda Motor <7267.t> due after the market close.
"If earnings continue to impress the market, the Nikkei may
rise further," said Makoto Kikuchi, chief executive officer at
Myojo Asset Management.
Japanese markets will be shut on Friday and will reopen on
Monday, ahead of more holidays next week.
Also highlighting hefty demand for higher-yielding assets
and exposure to fast-growing emerging Asian markets, Indonesia's
$2.5 billion medium-term note offering this week was nearly 3
times oversubscribed, with half the issue snapped up by U.S.
investors.
The dollar index , which tracks its performance
against a basket of major currencies, fell to as low as 72.878
-- a level not seen since July 2008.
Dealers also said several central banks in Asia were spotted
buying the greenback to check sharp gains in their currencies.
The euro rose to a 16-month high of $1.4878 , further
spurred by stop-loss buying after a breach of option barriers
around $1.4800, while the Australian dollar touched a post-float
high of $1.0948 .
In the commodities market, U.S. crude <CLc1> scaled a 2-1/2
year peak of $113.70 a barrel, and gold raced to a record
high above $1,530 an ounce. Copper gained nearly 2
percent to around $9,490 a tonne.
U.S. Treasury yields were a touch lower, after having risen
on Wednesday as the market made room for an upcoming seven-year
supply. The two-year yield slipped 1.2 basis points
to 0.6368 percent.
(Additional reporting by Masayuki Kitano in Singapore and Ayai
Tomisawa in Tokyo; Editing by Ramya Venugopal)
