* Asia stocks rise, Japan index falls as exporters slide
* Dollar edges up vs yen, awaits Fed meeting outcome
* Oil above $42 a barrel after 9 pct drop on Tuesday
By Charlotte Cooper
TOKYO, Jan 28 (Reuters) - Asian shares rose on Wednesday,
helped by gains on Wall Street, but Japan lagged as exporters
such as Honda Motor Co <7267.T> lost ground on news that U.S.
consumer confidence has slumped to record lows.
The dollar edged up 0.1 percent to 89.09 yen <JPY=> as
gains in stock markets prompted investors to dump the
safe-haven Japanese currency, while the dollar dipped versus
the euro as players awaited outcome of a Federal Reserve
meeting.
The U.S. central bank has already cut interest rates to
nearly zero and is searching for other tools to pull the
world's largest economy out of a deepening year-long recession.
The Fed could unveil fresh steps to ease the global credit
crunch when it concludes a two-day policy meeting later in the
day, and traders will be scouring its statement for any clues
on whether it will buy U.S. government bonds, which could help
check longer term borrowing rates. []
On Tuesday, the Fed took a step toward easing mortgage
foreclosures threatening millions of Americans, announcing that
it would write down troubled mortgages to keep people in their
homes.
Until the U.S. housing market stabilises, economists see
little hope that the economy can pull out of its downward
spiral. []
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 1.2 percent, buoyed by gains on Wall
Street, which rallied for the third day in a row on Tuesday on
hopes that government efforts to stabilize the U.S. economy
will take hold.
The Dow Jones industrial average <> rose 0.72 percent
while the Standard & Poor's 500 Index <.SPX> gained 1.09
percent and the Nasdaq Composite Index <> rose 1.04
percent, shrugging off a Conference Board report that its index
of consumer confidence fell to a record low on January. []
But many investors remain wary of commiting their cash
after heavy losses last year and a flurry of bleak economic
news and profit warnings from companies around the world.
In Tokyo, the benchmark Nikkei <> average fell 0.7
percent with shares in Nomura Holdings Inc <8604.T>, Japan's
largest brokerage, sliding about 3 percent after it reported a
record $3.8 billion quarterly loss on Tuesday.
The loss, reported after market hours, was larger than
forecast, and stemmed from the cost of integrating Lehman
Brothers' operations, soured trades and exposure to Iceland and
Bernard Madoff.
Canon Inc <7751.T> fell after a newspaper reported the
electronics maker's operating profit will likely drop about 60
percent this year primarily due to the strong yen. Canon
announces its results later on Wednesday. []
"Profit-taking is dominating the market after yesterday's
huge gains, but I don't expect it to fall too much as external
factors are not bad -- gains in U.S. stocks and a softer yen,"
said Soichiro Monji, chief strategist at Daiwa SB Investments,
"But investors have strong concerns about manufacturers'
earnings because of their exposure to the deteriorating global
economy and a risk that the yen could appreciate going
forward."
In Seoul, shares rose after Lunar New Year holidays, led by
chip makers after German rival Qimonda <QMNDQ.PK> filed for
insolvency.
The Korea Composite Stock Price Index <> rose about 4
percent, helped by Samsung Elec <005930.KS> and Hynix
<000660.KS>, which rose more than 14 percent on expectations
that Qimonda's move would help drain a glut of chips on the
market.
Australian shares gained 0.8 percent, shored up by the
banks, while top property stock Westfield Group <WDC.AX> and
building materials group Boral Ltd <BLD.AX> slid on profit
warnings.
"It seems like the market's been conditioned to being
knocked around for quite some time now, so we're taking bad
news in our stride. That's about the only way you could
describe it," said Michael Heffernan, strategist at broker
Austock Group.
STERLING CLAWS BACK SOME GROUND
The euro also climbed against the yen while sterling, which
hit a record low versus the Japanese currency last week, gained
0.4 percent to 126.18 yen <GBPJPY=R>.
The euro was up 0.4 percent at $1.3211 <EUR=>.
U.S. crude oil futures regained some ground after staging
their biggest percentage loss since early January. NYMEX crude
for March delivery <CLc1> was trading up 77 cents at $42.35 a
barrel.
Gold held near its highest in more than three months hit
this week, as troubles in the financial sector continued to
spur investors to look for havens from market turmoil.
Gold <XAU=> was trading at $900.55 an ounce, up $3.20 from
New York's notional close on Tuesday.
(Editing by Kim Coghill)
