Asian shares rise, weak yen boosts Tokyo

HONG KONG, March 30, 2011 (AFP) - Asian stocks rose Wednesday after a strong performance on Wall Street while Japanese exporters led Tokyo up thanks to a weaker yen, but fears over the atomic crisis continued to weigh.

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.

Hong Kong rose 1.21 percent, Sydney added 0.95 percent, Seoul was 0.66 percent higher 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 dollar jumped to 82.48 yen after the comments late Tuesday and in Asian trade Wednesday it rose further to 82.76 yen.

The Japanese unit was also under pressure from the euro and was at 116.49 yen from 115.23 amid expectations the European Central Bank will hike interest rates soon to fight inflation in the region.

"It's significant that the dollar broke above the high of 82 yen it had hit after the intervention (by the G7 amid the Japan atomic crisis) on March 18, and it seems there is basically a more bullish sentiment forming," Osao Iizuka, a senior dealer at Sumitomo Trust & Banking, told Dow Jones Newswires.

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.

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.

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