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SINGAPORE (Reuters) - Asian shares edged upwards Thursday,
mustering two cheers for Fed chief Alan Greenspan's
caution over the
economic recovery, as signs grew that strong domestic
demand could be
the best bet for regional growth.
By late afternoon, the dollar hovered at 130.55 yen
struggling to shake off
a soft tone despite verbal help from Japanese
authorities, stirring talk the
recent setback in the currency was more than just
temporary.
The dollar finished at 130.67 in New York having
fallen about half a yen
through Wednesday.
Japan's top financial diplomat Haruhiko Kuroda said
there was no reason
for the yen to strengthen given a faster recovery in
the U.S. economy,
killing market speculation the Finance Ministry had
ceased its verbal
campaign against the yen for fear of drawing criticism
at this weekend's
Group of Seven meeting.
International benchmark U.S. crude was down one cent
at $25.93 per
barrel by 0650 GMT. In Tokyo, the benchmark Nikkei
average ended up
0.3 percent at 11,575.73, after hopes of an export-led
recovery
prompted investors to buy auto issues such as Honda
Motor Co. Ltd.,
offsetting a slide in chip shares.
Bulls pinning their hopes on an economic recovery in
Japan this year
were encouraged by Greenspan's comments Wednesday.
The U.S. Federal Reserve chairman said Japan's economy
was
beginning to show signs of stability on the back of
firmer U.S. and
European economies.
"A slew of positive macroeconomic data and strong U.S.
earnings are
providing a floor under the Tokyo market, although
investors are
reluctant to chase shares higher ahead of the earnings
season in Japan,"
said Hirokazu Yuihama, senior strategist at Daiwa
Institute of Research.
WORRIES ABOUT GOVERNMENT POLICY
The Tokyo market's gains were limited to some extent
by worries about
government policy, especially a lack of initiatives to
boost demand and
stop deflation.
"A consensus is forming here that Japan's
microeconomy, in terms of
corporate earnings, is getting better although
macroeconomic conditions
are lagging behind," said Hiroaki Muto, general
manager at Nissay Asset
Management. South Korean shares ended at a 26-month
high as foreign
investors bought financials and retailers on
expectations of strong
first-quarter earnings driven by a rapid economic
recovery.
The benchmark Korea Composite Stock Price Index
(KOSPI) closed up
0.76 percent at 937.61, a six-day winning streak
taking it to its highest
since February 11, 2000.
Insurers jumped almost six percent, led by the
nation's top non-life
insurer Samsung Fire Insurance, which climbed 6.54
percent.
Banks gained 3.17 percent, as first-quarter earnings
beat market
expectations and a second round of consolidation is
expected soon in the
overcrowded sector.
Hong Kong's benchmark Hang Seng Index was up 0.3
percent at
11,123.80 by the midday break, lifted by Greenspan's
outlook for the
United States, the territory's second largest export
market, though
buying was cautious.