Asia stocks up; yen eases, eyes on govt, BOJ

Asian stocks rose on Thursday as investors hunted for bargains among recently beaten-down shares, while the yen pulled further away from 15-year highs as investors wondered whether Japanese officials would take fresh steps to curb the currency's strength and spur economic growth.
But concern about exposure to riskier assets continued to weigh on markets after U.S. data on Wednesday heightened fears that the world's biggest economy may be at risk of sliding back into recession.
U.S. new home sales slumped to the slowest pace on record in July and durable goods orders were weaker than expected, suggesting growth could slow sharply without more government or central bank support.
The latest in a growing string of weak data initially pushed major U.S. stock indexes lower, but they bounced back later in the session, indicating investors may see further dips as a buying opportunity and lending support to Asian markets. "There are increasing signs of a slowing global economy, and on top of that you have Japan's situation where it really isn't providing policy to deal with its economic issues," said Kenichi Hirano, operating officer at Tachibana Securities.
"Otherwise, why is the Nikkei performing so poorly? As corporate earnings showed, the economy itself is not doing badly enough to warrant the current weakness in shares, but the lack of clarity on the yen's strength is not good."
The Nikkei rose 0.3%, lifted by what market players said was short-covering and buying of futures by long-term domestic investors, after hitting a 16-month closing low on Wednesday.
But gains were capped by doubts about how much policymakers could really do to turn the ailing economy around, as well as fears of longer-term policy inaction prompted by a murky political outlook.
Japan's government will urge the Bank of Japan to ease monetary policy further as part of a package of steps to stem the yen's rise and support the economy, the Asahi newspaper said, ratcheting up pressure on the central bank to take action before a policy meeting next month.
The benchmark Nikkei broke below 9,000 this week for the first time since May 2009. The 9,000 to 9,100 area had been strong support since last year, and market players say there will be few technical targets to break the benchmark's further falls.
The MSCI index of Asia-Pacific stocks outside Japan rose 0.4%, led by sectors including consumer staples and healthcare, while those most sensitive to business cycles such as technology eked out smaller gains.
The index hit a 1-month low in the previous session and is down about 4% on the year, but has held up better than the all-country world index, which has fallen 7.2%.
Asia's strong economic growth apart from Japan has been a buffer against recent global shocks, with emerging markets continuing to attract foreign investors despite a broader aversion to riskier assets for much of the year.
Despite the day's gains in Asian stock markets, however, a clear falling trend in government bond yields around the world reflects deep unease that the chances of another recession are growing.
The benchmark 10-year Japanese government bond yield rose 2.5 basis points to 0.925% on falls in U.S. Treasury prices and profit-taking, but analysts said they expect yields to remain on a downtrend on lingering easing hopes.
U.S. crude oil rose for a second day, nearing $73 a barrel, as bargain-hunting and short-covering in equities spread to the oil market.
Gold edged up to $1,239.30 an ounce, hovering near its strongest level in eight weeks hit the previous day on persistent worries the U.S. recovery was stalling.