SINGAPORE, May 6 - The euro held near four-year highs in Asia on Tuesday while shares climbed on gains in U.S. technology stocks and easing SARS fears, hitting a one-month high in Japan and three-month peaks elsewhere. Higher European interest rates continued to attract investors disappointed with the dollar's inability to shake off scepticism over a recovery in the U.S. economy. But trade was subdued ahead of a Federal Reserve meeting later in the day that was expected to leave U.S. interest rates unchanged. "What's really standing out in the market now is the dollar's weakness," said Gen Kawabe, manager of the Treasury department at Chuo Mitsui Trust and Banking. "And you can't really buy the yen aggressively either."
The euro hit 133.94 yen , its highest since March 1999, and was quoted at $1.1284 at 0600 GMT, after rising to $1.1305 on Monday, its highest level since late February 1999. The Australian dollar also benefited from relatively high interest rates, rising to a three-year peak around US$0.6363. The dollar was steady against the yen around 118.60 yen . Currency and stock traders in Tokyo were also awaiting proposals to boost the Japanese share market. Japan's ruling coalition parties are expected to propose an array of such steps later on Tuesday, including the establishment of a stock-buying entity and using the massive reserves of the postal savings system to buy shares.
CATCHING UP WITH WALL STREET
With the Tokyo stock market also catching up with gains on Wall Street after a Japanese holiday on Monday, the Nikkei average <.N225> jumped 2.2 percent to 8,083.56, its highest close since April 8. "The market is eyeing these policy steps, but is not quite sure exactly how they'll come out. I think it will be a mixed bag showing some progress, but with the Nikkei above 8,000 it is probably fair to say the market has entered an uptrend," said Terushi Hirotama, head of trading at Ichiyoshi Securities.
Outside Japan, stocks edged up 0.3 percent to their best levels since January 29, as measured by the regional MSCI Asia Pacific ex-Japan Free Index <.MSCIAPJ>. South Korea was one of the biggest gainers, with the benchmark index <.KS11> adding 1.2 percent as worries cooled over North Korea's nuclear programme and the economic impact of Severe Acute Respiratory Syndrome (SARS). Top mobile phone operator SK Telecom <17670.KS> jumped 5.4 after reporting better than expected first-quarter earnings. Memory chip maker Hynix Semiconductor Inc <00660.KS> shot up 12 percent on a report its creditors would try to sell it to a Chinese company. South Korea was also closed for a holiday on Monday, so like Japan had two days of gains in U.S. technology stocks to catch up with. The Nasdaq Composite <.IXIC> ticked up 0.1 percent on Monday, after a two percent rise on Friday, but the Dow Jones Industrial Average <.DJI> lost 0.6 percent.
Shares rose 0.4 percent in Taiwan <.TWII> on talk state-linked funds were buying after recent losses triggered by SARS worries. Hong Kong and Singapore were little changed by midday after recent strong gains on hopes the SARS outbreak had peaked. Hong Kong <.HSI> was up 0.2 percent and Singapore <.STI> eased 0.1 percent. Australian stocks <.AXJO> lost a third of a percent. Other Asian stock markets were higher, save for Malaysia's <.KLSE>, which dipped 0.1 percent by midday. U.S. light crude oil eased three cents to $26.46 a barrel, while gold was little changed at $341.75 an ounce.//