GLOBAL MARKETS-Asian stocks rise; yen weakens on euro, U.S. rate bets

* Yen falls on expected European, U.S. policy tightening

* Nikkei rises 1.8 pct on weaker yen, other Asian shares up

* Asian stocks ex-Japan eke out quarterly gain

* Oil slips before inventory data, gold flat

By Richard Leong

HONG KONG, MARCH 30 – Asian stocks rose on Wednesday as
investors were drawn back to riskier assets by attractive
valuations, while Japanese exporters were helped by the yen’s
weakness on expectations of interest rate rises in Europe and
the United States.

Renewed demand for equities came despite concerns the global
economy could be hurt by Japan’s struggle to contain the world’s
worst nuclear crisis in decades, conflicts in Libya and the
Middle East and Europe’s festering sovereign debt problems.

Investor concerns over those risks have eased, for now, with
expectations that stocks worldwide will move higher into the new
quarter, analysts and traders said.

“Global equities are stronger and it’s risk-on again,” a
trader at a U.S. investment bank said.

Japan’s Nikkei index rose 0.48 percent in early
trading, after two days of losses. So far in March, it has shed
9.9 percent, heading for its worst month since May 2010. For the
year to date, the benchmark has fallen 6.4 percent.

Other Asian equities have recovered from their losses since
a devastating earthquake and tsunami hit northeast Japan on
March 11. MSCI’s index of Asia-Pacific shares outside Japan
was up 0.49 percent on the day. It has risen 3.5
percent so far in March and up 0.1 percent quarter-to-date.

MSCI’s world index rose 0.2 percent, taking
its gains for the year so far to about 3 percent, with weakness
in Asia offset by strong gains early in the year in major
indexes in the United States and Europe as investors rotated
from emerging markets to large, developed ones.

The yen dipped to a 10-month low against the euro and neared
a three-week trough versus the dollar early in Asia, having
suffered broad losses after several chart support levels were
breached and on expectations of rising rates in Europe and
United States.

In recent days, several top U.S. central bank officials said
further bond purchases by the Federal Reserve were not needed to
support the economy, while European Central Bank President
Jean-Claude Trichet signaled his inflation concerns from rising
food and energy prices.

SHIFT TO GRADUAL POLICY TIGHTENING

“We’ve had comments from the Fed and a shift in sentiment
towards the U.S. policy from a rate perspective that has really
pushed U.S.-Japan yield differentials, driving the dollar
higher,” said Mitul Kotecha, head of global FX strategy at
Credit Agricole in Hong Kong.

Traders have been adjusting their books and most investors
have moved to the sidelines in advance of the last day of the
quarter and Japan’s fiscal year. Light volume has heightened
intraday volatility across financial markets.

The dollar rose as high as 82.87 yen , well above the
76.25 all-time low, which it scaled in the week after the quake.

The euro climbed to 116.69 yen after breaking
through major resistance around 115.50/60, a level that has
capped the pair since May 2010. It last traded at 116.67.

Among precious metals, gold was flat, paring initial gains,
after four consecutive losing sessions as hawkish central bank
comments reduced its appeal as an inflation hedge.

Spot gold traded at $1,415.89 an ounce, after traded
as high as $1,419,50 earlier. This compared with $1,415.95 late
in New York on Tuesday. It is 2 percent below the record high of
$1,447.40 set on March 24.

U.S. oil prices fell as an expected rise in U.S. domestic
crude stocks offset worries over turmoil in Libya and the Middle
East.

Several OPEC producers have boosted output recently to make
up for supply disruptions in Libya as rebels fight government
forces, easing supply concerns.

U.S. crude (CLc1: Quote, Profile, Research) fell 61 cents to $104.19 a barrel, while
Brent crude (LCOc1: Quote, Profile, Research) slipped 57 cents to $114.59.

(Reporting by Ian Chua in SYDNEY,; Edwina Gibbs and Antoni
Slodkowski in TOKYO, Randy Fabi and Lewa Pardomuan in
SINGAPORE,)

GLOBAL MARKETS-Asian stocks rise; yen weakens on euro, U.S. rate bets