Tokyo's Nikkei <.N225> added 0.3 percent in morning trade on what is
its last trading day of the year. The market is closed from Tuesday
to Friday. Australian stocks rose 0.5 percent <.AXJO> to bring their
gains for the year to 15 percent.
Much of Asia, however, continued to underperform, in part due to
investors shifting funds from emerging markets and into Europe and
the United States.
Japan's competitors have also been complaining about the weak yen
giving it a trade advantage. South Korea's deputy finance minister
warned the yen was falling too fast, and the head of China's
National Development and Reform Commission said the impact on
neighbors needed to be monitored.
That could have been one reason Seoul's KOSPI <.KS11> was flat on
the day, as was MSCI's broadest index of Asia-Pacific shares outside
In stark contrast, Japan's Nikkei has risen almost 56 percent in
2013, its best annual performance since 1972, urged on by aggressive
monetary and fiscal stimulus.
There were more promising signs for the economy when the Asahi
newspaper reported Japan's most influential business lobby has
agreed to encourage its members to raise workers' base pay for the
first time in six years.
Many economists say an increase in base pay is essential to Prime
Minister Shinzo Abe's pledge to end 15 years of deflation and to
help the Bank of Japan meet its 2 percent inflation target.
Aiding the economy has been the fall in the yen this year, which has
left it at five-year trough against the dollar and euro.
The dollar was up at 105.30 yen on Monday after reaching a fresh
peak at 105.37. The yen has posted ninth consecutive weeks of falls
against the dollar, the longest such run since 1974.
The euro was also firm at 144.82 yen, having been as far as 145.67
yen on Friday.
Thin year-end conditions made for some wild moves, with the euro
vaulting as high as $1.3892 on Friday before falling back. On
Monday, the single currency was somewhat calmer at $1.3747 with
offers crowded in the $1.3810/35 area.
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The single currency could find further support from comments by
European Central Bank President Mario Draghi that he saw no urgent
need to cut interest rates again and no signs of deflation. <TOP/CEN>
Less positive was news Italy's third-biggest bank, Monte dei Paschi
di Siena, <BMPS.MI> was forced to delay a vital 3 billion euro ($4.1
billion) share sale because of shareholder opposition, plunging its
turnaround plan into uncertainty.
The world's oldest bank needs to tap investors for cash to pay back
state aid and avert nationalization.
Underpinning both the dollar and euro have been widening yield
premiums over Japanese debt.
Yields on the U.S. benchmark 10-year Treasury note have climbed to
their highest in more than two years at 3.02 percent. The comparable
Japanese yield is at just 0.715 percent.
Analysts at RBS note that yields on the 30-year Treasury bond were
approaching a hugely important level at 4.05 percent, which marks
the top of a bull channel going back two decades. A breach there
would be viewed as very bearish for bonds.
In commodity markets, London copper was up at its highest level in
four months, with signs of economic revival in Asia and the United
States burnishing the demand outlook for industrial metals.
Gold edged up to $1,213, but remained on track for its biggest
annual loss in three decades.
Brent crude oil was 5 cents firmer at $112.23 a barrel, while U.S.
light sweet crude eased back 8 cents to $100.24 a barrel.
(Editing by John Mair)
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