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GLOBAL MARKETS-Tokyo hits 3-mth high as tech shares rally

Published 12/22/2009, 02:47 AM
GC
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* Dlr hits two-month high against the yen

* Tokyo stocks mark 3-month closing high, yen helps exporters

* Asian tech shares rally after Nasdaq hits 15-mth high

* European stock markets set to open slightly higher

By Susan Fenton

HONG KONG, Dec 22 (Reuters) - Tokyo stock market rose to its highest close in three months on Tuesday as exporters were spurred by the dollar's rally against the yen and technology shares gained off the back of an Intel upgrade.

Asian shares rose across the board as technology stocks tracked a rally in their peers on Wall Street that took the Nasdaq to a 15-month high.

European stock markets were set to open slightly higher, according to financial spreadbetters, while U.S. equity stock futures were up 0.3 percent.

The dollar touched 91.49 yen , its highest level since late October, helped by the unwinding of short positions ahead of the year end. The dollar was steady against a basket of major currencies <.DXY> after reaching multi-week highs on Monday.

Recent robust U.S. economic data is supporting the dollar, raising expectations that the U.S. Federal Reserve may raise interest rates sooner than earlier thought.

"It does all get back to when the Fed may or may not be tightening policy and the market is heading towards thinking they will get to tightening in Q3 next year," said Greg Gibbs, a currency strategist at RBS in Sydney.

Gold picked up, trading at $1,094.20 an ounce after hitting a six-and-a-half week low at $1,090.65 on Monday. It has been depressed by the dollar's rebound and is nearly 11 percent below record highs hit earlier this month.

AUSSIE DOLLAR SKIDS

Tokyo's Nikkei average <.N225> rose 1.9 percent to a three-month closing high. Shares of high-tech exporters gained after the tech-heavy Nasdaq hit the 15-month high, spurred by a brokerage upgrade of Intel Corp that cited solid "end-market" conditions. [ID:nSGE5BK0H9]

Tokyo Electron Ltd <8035.T>, the world's No.2 semiconductor equipment maker, climbed 3.8 percent and chip-tester maker Advantest Corp <6857.T> firmed 4.5 percent. Sony Corp <6758.T> gained 2.7 percent.

Toshiba Corp <6502.T> climbed 4.7 percent, while DRAM chipmaker Elpida <6665.T> gained 4.6 percent.

High-tech shares had also advanced on Monday following solid quarterly results from Oracle and BlackBerry maker Research In Motion .

Taiwan's United Microelectronics Corp <2303.TW>, the world's No. 2 contract chip maker, jumped 2.5 percent.

The MSCI index of Asia Pacific stocks traded outside Japan <.MIAPJ0000PUS> rose nearly 1 percent, backed by the technology advances. The index has surged 60 percent this year.

Markets will be watching U.S. home sales data and a final reading of Q3 U.S. GDP due later on Tuesday for further indications about the health of the world's biggest economy.

Chicago Fed President Charles Evans said on Monday he expected the U.S. economy to grow by 3 to 3.5 percent over the next 18 months. [ID:nN21406408]

U.S. Treasury yields hit a four-month high as markets speculate that a faster U.S. economic recovery means the U.S. will raise rates before the euro zone. [ID:nTOE5BL036]

Rising U.S. yields are eating into the Australian dollar's interest rate advantage, pushing it to an 11-week low at $0.8764.

Expectations for more M&A activity in the new year boosted Australian shares <.AXJO>, which rose 1.5 percent.

The dollar's strength has also put pressure on oil , but it held steady on Tuesday at $73.84 a barrel ahead of an OPEC meeting in Angola, where the cartel is expected to leave output limits unchanged. [ID:nLDE5BKOKK]

"Currency is the most important factor at the moment to move the crude market," said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo. (Additional reporting by Charlotte Cooper in TOKYO and Judy Hua in SINGAPORE; Editing by Neil Fullick) (susan.fenton@thomsonreuters.com; +852 2843 6367; Reuters Messaging: susan.fenton.thomsonreuters.com@reuters.net)

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