Asian shares rise, weak yen boosts Tokyo

HONG KONG: Asian stocks rose Wednesday after a strong performance on Wall Street while Tokyo surged thanks to a weaker yen, but traders remained cautious due to ongoing fears over Japan's atomic crisis.

The dollar surged against the Japanese unit after a second senior Federal Reserve official talked up the possible tightening of monetary policy, such as a interest rate rise or the ending of "quantitative easing".

Tokyo gained 1.22 percent by the break as the yen tumbled against the greenback and euro.

However, traders remained cautious as crews continued their struggle to avoid a meltdown at the crippled Fukushima Daiichi plant that was rocked by the March 11 quake and tsunami.

"It would be best if there is more progress on the nuclear (power plant crisis) issue, but it's unrealistic to expect shares to rise further when corporate earnings (outlook) is uncertain," said Cosmo Securities strategist Toshikazu Horiuchi.

Sydney added 1.40 percent, or 66.4 points, to end at 4,822.2 and Seoul rose 0.93 percent, or 19.25 points, to 2,091.38.

Hong Kong was 1.71 percent higher by the break and Shanghai was flat.

Regional investors were given a boost by a 0.67 percent gain on the Dow Jones Industrial Average on Tuesday, its seventh rise in nine sessions caused by confidence in the US economy.

St Louis Fed President James Bullard suggested the bank could bring an end to its loose monetary policy $100 billion short of the $600 billion target of its bond-buying programme, known as quantitative easing.

The comments followed similar noises earlier this week from Philadelphia Fed President Charles Plosser, who said monetary policy would have to be normalised "in the not-too-distant future".

The end of easy money could also lead to higher interest rates.

The dollar jumped to 82.48 yen after the comments late Tuesday and in Asian trade Wednesday it rose further to 82.86 yen.

The Japanese unit was also under pressure from the euro and was at 116.81 yen from 115.23 amid expectations the European Central Bank will hike interest rates soon to fight inflation in the region.

"Growing expectations of a rate rise in Europe and US mean people are getting optimistic about the outlook for the global economy", which is giving market participants the appetite to take more risks, Kuniyuki Hirai, at Bank of Tokyo-Mitsubishi UFJ, told Dow Jones Newswires.

However, the greenback hit a fresh low $1.0327 against the Australian dollar as risk appetite returns and dealers look for higher yielding currencies.

Although Japanese traders took solace in the weakening yen the nuclear plant crisis continued to play on sentiment as radioactive water held up repair work while plutonium had been found in nearby soil.

TEPCO, which operates the stricken plant, slumped 17.66 percent as the crisis continued and investors fret that the government will temporarily nationalise the utility for corporate reconstruction.

The stock has now lost more than three quarters of its pre-earthquake value.

On oil markets New York's main contract, light sweet crude for delivery in May, lost 55 cents to $104.24 per barrel while Brent North Sea crude for May dipped 21 cents to $114.95.

Gold opened at $1,415.70-$1,416.70 an ounce in Hong Kong, unchanged from Tuesday's close of $1,418.00-$1,419.00.

In other markets:

-- Manila soared 2.98 percent, or 116.51 points, to 4,023.74.

The index was given a huge boost by news that heavyweight Philippine Long Distance Telephone and rival Digitel had merged in a 69.2 billion peso ($1.59 billion) deal.

Top-traded PLDT surged 15.7 percent to 2,356 pesos, although Digitel fell 14.7 percent to 1.56 pesos.

JG Summit Holdings, the holding firm that controls Digitel, rose 3.5 percent to 25.35 pesos.

-- Taipei rose 0.58 percent, or 49.74 points, to 8,646.31.

Chunghwa Telecom rose 1.33 percent to Tw$91.1 while Taiwan Semiconductor Manufacturing Co fell 0.28 percent to Tw$70.6.

-- Wellington closed 0.35 percent, or 11.97 points, higher at 3,433.16.

Fletcher Building rose 0.3 percent to NZ$9.20, Air New Zealand was unchanged on NZ$1.11 and retailer Warehouse Group climbed 0.6 percent to NZ$3.51.