* MSCI Asia Pacific ex Japan stocks index at near 3-mth
high
* Dollar flat vs euro after Geithner roller coaster
overnight
* U.S. Treasuries steady after drop on tepid 5-yr auction
* NZ bonds drop sharply; c.bank denies emergency meeting
By Rafael Nam
HONG KONG, March 26 (Reuters) - Asian stocks rose to their
highest in nearly three months on Thursday, led by energy and
financial shares, and oil climbed on hopes the U.S. economic
slowdown may be easing.
Major European stocks were expected to open higher, with
stock futures up 0.9 percent <STXEc1>, as investors globally
waded back into riskier assets and trimmed safety trades.
The U.S. dollar steadied against major currencies after
tumbling overnight on comments from U.S. Treasury Secretary
Timothy Geithner that he was open to expanding the use of the
International Monetary Fund's special drawing rights, appearing
to endorse an idea put forward by China.
Regional bonds were hit by stock market gains, while U.S.
Treasuries steadied after falling on Wednesday on concerns that
a planned surge in government debt supply to fund stimulus
plans would exceed demand.
Strong U.S. housing and durable goods data fed a global
equity rally that has persisted for nearly three weeks, based
on scattered signs of stabilisation and confidence the
financial sector has seen its worst days. []
"The main factor holding the market up is increased
optimism regarding an economic recovery later this year," said
Shane Oliver, head of investment strategy at AMP Capital
Investors on the stock market rally.
"It remains to be seen whether we have seen the bottom or
not, but the rally we've been seeing in the last few weeks
probably still has a bit further to go," he added.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> gained for a fourth consecutive session and
climbed 2.1 percent to the highest since Jan. 8.
Japan's Nikkei average <> finished 1.8 percent higher,
with large exporters such as Canon Inc <7751.T> and Sony Corp
<6758.T> among the biggest boosts to the index.
Hong Kong's Hang Seng index jumped 3.4 percent, propelled
by a 13 percent gain in Industrial and Commercial Bank of China
<1398.HK> after Goldman Sachs said it would extend the lockup
on most of its stake in the firm.
An easing of concerns about the U.S. economy and its banks,
plus hopes the U.S. government is getting to grips with toxic
assets has fuelled a rise of 18 percent in the MSCI ex Asia
index so far this month.
But officials urged more global action.
Monetary and fiscal authorities have plenty of ammunition
to combat the deepest downturn in decades and the measures
already taken will be critical in driving a recovery, the
presidents of the Federal Reserve banks of San Francisco and
Cleveland said in separate remarks on Wednesday.
[]
Chinese Finance Minister Xie Xuren said countries should
increase their economic stimulus packages if need be to boost
market confidence, while a senior IMF official warned the world
economy will not start its recovery as expected in 2010 if
countries withdraw fiscal stimulus too soon. []
DOLLAR DOUBTS
Geithner told policy makers and business executives at the
Council on Foreign Relations that he was "quite open" to a
Chinese suggestion to move toward greater use of SDRs, a basket
of dollars, euros, sterling and the yen, used by the IMF.
[]
Earlier this week, Chinese central bank governor Zhou
Xiaochuan said the world should consider using the IMF's SDRs
basket as a super-sovereign reserve currency.
But the dollar pared losses after Geithner reiterated that
he expected the currency to remain the top reserve currency for
a long time.
"The dollars reaction to his comments demonstrates that
even statements by a US Treasury Secretary who clearly has not
yet worked out that he has to choose his words carefully cannot
question the role of the dollar as reserve currency -- if for
no other reason than lack of alternatives," said Commerzbank
currency strategists in a note.
The euro was steady at $1.3585 <EUR=>, having pulled back
from Wednesday's high of $1.3653.
Increasing risk appetite is taking away some of the bid for
safe-haven debt. But bonds are also being undermined by
concerns of massive government supplies to fund stimulus plans.
U.S. Treasuries steadied on Thursday after yields reached
their highest levels in a week on Wednesday following tepid
demand in a record-large auction of five-year Treasury notes.
The U.S. Treasury is set to auction $24 billion of
seven-year notes <US7YT=RR> on Thursday, bringing the week's
total issuance to a record $98 billion. []
Benchmark 10-year Treasury notes <US10YT=RR> traded steady
at a yield of 2.81 percent.
New Zealand bonds fell sharply, sending yields as much as
35 basis points higher on the day as the central bank denied
market speculation it would hold an emergency meeting to
discuss a sharp spike in five-year bonds. []
In commodity markets, U.S. oil prices <CLc1> advanced 1.1
percent to $53.35, while .
