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GLOBAL MARKETS-Asia shares hit 14-mth peak, dollar slumps

Published 10/15/2009, 12:01 AM
Updated 10/15/2009, 12:03 AM
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* Asia shares hit 14-mth highs after strong U.S. retail sales

* Rising risk appetite sends U.S. dollar to 14-month low

* Oil rises to one-year high near $76

* Aussie, NZ currencies jump as rate rise speculation grows

* Korea, Taiwan intervene to curb appreciating currencies

By Susan Fenton

HONG KONG, Oct 15 (Reuters) - Asian shares rose to 14-month highs on Thursday as upbeat retail sales and surprisingly bullish earnings reports in the United States buoyed risk appetite, pushing the U.S. dollar to a 14-month low.

Shares in Japan jumped more than 2 percent as investors bought exporters who might benefit from rising U.S. demand and stocks in the rest of Asia firmed to their highest levels since last August.

Positive sales and earnings data from the United States -- including from Intel Corp and JP Morgan Chase & Co -- pushed the Dow Jones up 1.5 percent on Wednesday and above 10,000 points for the first time in a year.

U.S. government data showed that retail sales, excluding autos, rose for a second straight month in September.

Growing confidence that the United States can fuel a global economic recovery encouraged investors to buy riskier assets, such as higher-yielding currencies, including the Australian and New Zealand dollars, which were additionally boosted by rising expectations for interest rate hikes.

Authorities in Taiwan, Korea and the Philippines were spotted buying U.S. dollars to curb strength in their currencies. Several Asia countries have intervened in recent weeks to cap their currencies and keep them competitive in export markets.

The Aussie dollar hit a 14-month high at $0.9183 to the U.S. dollar after the Reserve Bank of Australia pointed to more rate rises. Last week, it became the first central bank in the Group of 20 to tighten policy as the global financial crisis eases.

"We have said that, over time, interest rates will need to be adjusted towards a more normal setting as the economy recovers," Governor Glenn Stevens said in a speech. "A step in that direction was taken last week."

In New Zealand, data showing stronger-than-expected inflation raised the likelihood of a rise in interest rates in coming months and sent the Kiwi to a 15-month high of $0.7485.

The flow of cash into riskier assets has knocked the U.S. dollar, a trend that pushed the currency to a 14-month low of 75.284 against a basket of currencies and against the euro at $1.4958.

Expectations of healthy global growth prodded NYMEX crude futures to a one-year high near $76 a barrel after U.S. industry data showed a surprise drop in inventories.

Gold gold held above $1,060 an ounce, just below Wednesday's record high above $1,070.

JAPAN EXPORTERS GAIN

Tokyo's Nikkei average rose 2.1 percent to 10,272.62, helped by auto maker Honda Motor Co, which gained 2.5 percent.

The MSCI index of Asia Pacific stocks traded outside Japan rose 1.4 percent to 414.96, its highest level since August last year. The Thomson Reuters index of regional shares was up 0.8 percent.

Shares in Hong Kong rose 1.6 percent and those in Shanghai increased 0.8 percent.

Bullish U.S. earnings reports boosted technology shares in Taiwan, lifting Taiwan's benchmark stock index by nearly 1 percent.

Shares in Acer Inc, which surpassed Dell Inc in the third quarter to become the world's No. 2 PC maker behind Hewlett-Packard, rose 1 percent. (Additional reporting by Gyles Beckford in WELLINGTON and Anirban Nag in SYDNEY; Editing by Neil Fullick)

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