Yen near lows vs dollar, Asian shares ease in subdued trade

TOKYO (Reuters) - The yen hovered near its lows against the dollar and Tokyo stocks jumped closer to a 33-month high on Tuesday after markets took comments from a U.S. official as approval for Japan to pursue anti-deflation policies that weaken the yen.

U.S. Treasury Undersecretary Lael Brainard said on Monday the United States supports Japanese efforts to end deflation, but she noted that the G7 has long been committed to exchange rates determined by market forces, "except in rare circumstances where excess volatility or disorderly movements might warrant cooperation.

"Her (Brainard's) comments gave confidence to the market. It was surprising, and was taken as the Obama administration giving a green light to 'Abenomics'," said Takuya Takahashi, a market analyst at Daiwa Securities.

Japan has faced some overseas criticism that it is intentionally trying to weaken the yen with monetary easing, but talk of a so-called currency war was dialled back ahead of a Group of 20 meeting in Moscow on Friday and Saturday.

G20 officials said on Monday the Group of Seven nations are considering a statement this week reaffirming their commitment to "market-determined" exchange rates.

European Central Bank council member Jens Weidmann also said the euro was not overvalued at current levels.

The dollar slipped 0.3 percent to 94.185 yen after marking its highest level since May 2010 of 94.465 on Monday. The euro eased 0.3 percent to 126.12 yen after rising more than 2 percent on Monday. It hit its highest since April 2010 of 127.71 yen last week.

"I think the yen's weakening is a function of (playing)catch-up," and not Japan resorting to deliberate devaluation of its currency, said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York. "It's the market's way of saying: 'We're convinced there is a movement afoot to reinflate Japan.'"

The yen is pressured by anticipation that Prime Minister Shinzo Abe will endorse a far more dovish Bank of Japan regime when the current leadership's term ends next month, although the BOJ is expected to refrain from taking fresh easing steps when it meets this week.

Share trading was subdued with many regional bourses shut for holidays. Encouraging trade data from China late last week was lending support to sentiment but non-Japan markets lacked momentum as investors awaited key events such as the U.S. president's State of the Union address for trading cues.

European markets are seen inching lower, with the Euro STOXX 50 index futures down 0.1 percent. A 0.2 percent drop in U.S. stock futures also suggested a soft Wall Street start. <.l><.eu><.n/>

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> fell 0.1 percent, with Australian shares closing flat ahead of corporate earnings due this week.

The weaker yen in turn hoisted the Nikkei stock average <.n225> to close 1.9 percent higher on improving earnings prospects for exporters. <.t/>

Trading resumed in Japan and South Korea but markets in Singapore, Hong Kong, mainland China, Malaysia and Taiwan remained closed.

STATE OF UNION ADDRESS

Currency and equities markets were also looking ahead to President Barack Obama's State of the Union address later on Tuesday night, for any signs of a deal to avert automatic spending cuts due to take effect March 1.

"We believe that the G20's take on currency wars, Mr. Obama's upcoming state of the union address, and data on the current condition of the U.S. economy should help markets assess where the global recovery stands and where we are heading," Barclays Capital said in a research report.

U.S. and Chinese data last week lifted the tech-focused Nasdaq Composite Index <.ixic> to a 12-year closing high and the Standard & Poor's 500 Index <.spx> to a five-year peak on Friday.

Financial markets showed a muted reaction to the news that North Korea has conducted a nuclear test.

"The test was not something that makes your heart pound as much as a pressing situation between Iran and Israel," said Kaname Gokon, research manager at brokerage Okato Shoji, referring to the threat of possible military action to prevent Iran from developing nuclear weapons.

U.S. crude futures edged down 0.1 percent to $96.90 a barrel while Brent steadied around $118.

Spot gold stayed near a one-month low.

(Additional reporting by Ayai Tomisawa, Lisa Twaronite and Osamu Tsukimori in Tokyo; Editing by Chris Gallagher)

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Equities, oil steady; euro dips in holiday-thinned trade

SINGAPORE (Reuters) - Oil and equities dawdled on Monday near multi-month highs scaled after robust Chinese trade data last week, while the euro slipped to a two-week low as uncertainty surrounded a political scandal in Spain and a looming election in Italy.

With the Lunar New Year holiday shutting most Asian financial centers, including those in Japan, China, Hong Kong, Singapore and South Korea, trading was light and volatile on many of those exchanges that remained open.

European markets were expected to likewise lack momentum in the absence of major economic drivers and ahead of a meeting of the Eurogroup, where the discussion around the risk of a global round of competitive currency devaluation could re-emerge.

Financial bookmakers called major European indexes <.ftse><.gdaxi><.fchi>to open flat.

Australian shares <.axjo> were flat after closing at a 34-month high on Friday following positive data from China, the most important consumer of Australia's commodity exports.

S&P 500 index futures inched up 0.1 percent after the Wall Street benchmark reached a five-year high on Friday.

Brent crude oil, which touched its highest in nine months on Friday, was unchanged just below $119 a barrel.

Foreign exchange trading was choppy in thin volumes, with what traders interpreted as slightly dovish comments from the European Central Bank last week also weighing on the euro, which has shed around 2.5 percent since reaching a 15-month high above $1.37 on February 1.

The euro briefly fell to $1.3325 on Monday, after stop-loss selling was triggered below $1.3340, traders said, before recovering to stand little changed around $1.3370.

There are growing worries about Spain as a scandal on secret cash payments engulfs the prime minister, while confidence in Italy has been shaken in the run-up to a February 24-25 election. "The euro's upside is likely to be limited and short-lived," said Aroop Chatterjee, an analyst at Barclays Capital.

"Better financial conditions are likely to be offset by rising political risks, market positioning and a weaker economy. We expect the euro to be on a declining trend beginning in Q2."

The yen pared a little of its recent heavy losses after Japanese Finance Minister Taro Aso said it had weakened more than intended.

The currency, which has been an easy one-way bet for weeks as Prime Minister Shinzo Abe put intense pressure on the central bank to take bold action to revive Japan's fragile economy, also recovered from its recent 4-week trough against the Aussie, the latter changing hands at 95.25 yen AUDJPY=R, compared with a peak of 97.42 set on Tuesday.

(Additional reporting by Ian Chua in Sydney and Vidya Ranganathan in Singapore; Editing by Shri Navaratnam)

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Stocks end higher for sixth straight week, tech leads

NEW YORK (Reuters) - The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures.

The S&P 500 also posted a sixth straight week of gains for the first time since August.

The technology sector led the day's gains, with the S&P 500 technology index <.splrct> up 1.0 percent. Gains in professional network platform LinkedIn Corp and AOL Inc after they reported quarterly results helped the sector.

Shares of LinkedIn jumped 21.3 percent to $150.48 after the social networking site announced strong quarterly profits and gave a bullish forecast for the year.

AOL Inc shares rose 7.4 percent to $33.72 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales.

Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government.

"That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States.

The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since December 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon.

"I think we're in the middle of a trading range and I'd put plus or minus 5.0 percent around it. Fundamental factors are best described as neutral," Dickson said.

The Dow Jones industrial average <.dji> ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index <.spx> was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index <.ixic> was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000.

For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent.

Shares of Dell closed at $13.63, up 0.7 percent, after briefly trading above a buyout offering price of $13.65 during the session.

Dell's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell.

Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated.

Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a 1.9 percent growth forecast at the start of the earnings season.

Molina Healthcare Inc surged 10.4 percent to $31.88 as the biggest boost to the index after posting fourth-quarter earnings.

The CBOE Volatility index <.vix>, Wall Street's so-called fear gauge, was down 3.6 percent at 13.02. The gauge, a key measure of market expectations of short-term volatility, generally moves inversely to the S&P 500.

"I'm watching the 14 level closely" on the CBOE Volatility index, said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research. "The break below it at the beginning of the year signaled the sharp rally in January, and a rally back above it could be a sign to exercise some caution."

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outpaced decliners on the NYSE by nearly 2 to 1 and on the Nasdaq by almost 5 to 3.

(Additional reporting by Angela Moon; Editing by Bernadette Baum, Nick Zieminski, Kenneth Barry and Andrew Hay)

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Stocks end higher for sixth straight week, tech leads

NEW YORK (Reuters) - The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures.

The S&P 500 also posted a sixth straight week of gains for the first time since August.

The technology sector led the day's gains, with the S&P 500 technology index <.splrct> up 1.0 percent. Gains in professional network platform LinkedIn Corp and AOL Inc after they reported quarterly results helped the sector.

Shares of LinkedIn jumped 21.3 percent to $150.48 after the social networking site announced strong quarterly profits and gave a bullish forecast for the year.

AOL Inc shares rose 7.4 percent to $33.72 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales.

Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government.

"That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States.

The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since December 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon.

"I think we're in the middle of a trading range and I'd put plus or minus 5.0 percent around it. Fundamental factors are best described as neutral," Dickson said.

The Dow Jones industrial average <.dji> ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index <.spx> was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index <.ixic> was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000.

For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent.

Shares of Dell closed at $13.63, up 0.7 percent, after briefly trading above a buyout offering price of $13.65 during the session.

Dell's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell.

Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated.

Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a 1.9 percent growth forecast at the start of the earnings season.

Molina Healthcare Inc surged 10.4 percent to $31.88 as the biggest boost to the index after posting fourth-quarter earnings.

The CBOE Volatility index <.vix>, Wall Street's so-called fear gauge, was down 3.6 percent at 13.02. The gauge, a key measure of market expectations of short-term volatility, generally moves inversely to the S&P 500.

"I'm watching the 14 level closely" on the CBOE Volatility index, said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research. "The break below it at the beginning of the year signaled the sharp rally in January, and a rally back above it could be a sign to exercise some caution."

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outpaced decliners on the NYSE by nearly 2 to 1 and on the Nasdaq by almost 5 to 3.

(Additional reporting by Angela Moon; Editing by Bernadette Baum, Nick Zieminski, Kenneth Barry and Andrew Hay)

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China's trade picks up, inflation eases

BEIJING (AP) — China's trade picked up and inflation eased in January as a shaky economic recovery gained traction.

Much of the change was due to the Lunar New Year holiday, which distorts China's economic data each year. But analysts said data reported Friday looked promising.

Export growth accelerated to 25 percent from the previous month's 14.1 percent as companies rushed to fill orders before shutting down for a holiday break of up to two weeks. Import growth accelerated to 28 percent, more than quadruple the previous month's 6 percent.

China's trade growth has rebounded in recent months in a sign of economic recovery but longer-term trade measures are likely to show lower growth than January's double-digit increase. Analysts say the recovery will be gradual and too weak to support a global rebound without improvement in the United States and Europe.

"Seeing the underlying trend is a little difficult. Nevertheless, the data were above expectations and seem generally positive," said Moody's Analytics economist Alaistair Chan in a report.

Last year's Lunar New Year shutdown began in January, leaving fewer work days and boosting this year's figures by comparison. This year's holiday falls entirely in February, which will make this month's trade look unusually weak.

Once holiday distortions are factored out, trade growth for the first three months of the year should be in high single digits, said Goldman Sachs economists in a report.

China's economic growth ticked up in the final quarter of last year from a three-year low. The World Bank and private sector forecasters expect economic growth of about 7.5 percent this year. That would be stronger than the West and Japan but China's weakest performance since the 1990s.

Inflation eased to 2 percent in January from the previous month's 2.5 percent despite a 37 percent jump in vegetable prices after the coldest winter in seven years damaged crops, the National Bureau of Statistics reported. Vegetable prices in some areas soared 74.6 percent.

The inflation decline was due in part to comparison with last January, when the Lunar New Year holiday began earlier and food prices spiked as families stocked up for banquets. This year, the food price spike will show up in February data.

Pressure for prices to rise has increased in recent months, possibly constraining Beijing's ability to support the recovery if needed with more spending or interest rate cuts. Inflation is politically dangerous in a society where the poorest families spend up to half their incomes on food.

Beijing is pinning its hopes for recovery on government-driven investment and domestic consumer spending. That is rising but not as fast as authorities want, forcing the government to fill the gap with spending on building subways and other public works.

Analysts warn China's recovery could be vulnerable if trade or government spending weaken. Societe Generale said last month there still is a chance of a "hard landing," with growth dropping below 6 percent, which would be dangerously low for China.

"A deceleration is likely by the end of the year if further stimulus measures are not forthcoming, which they probably won't because of latent inflation pressures," said Chan of Moody's. "Exports are expected to record moderate growth as the global economy recovers."

China's global trade surplus widened 6.5 percent from January 2012 to $29.2 billion. Exports were $187.4 billion while imports totaled $158.2 billion.

The politically volatile trade surplus with the United States, which has temporarily overtaken the struggling European Union as China's biggest export market, narrowed by 2.8 percent from a year earlier to a still-hefty $17.2 billion.

The trade surplus with the 27-nation EU contracted 10.9 percent to $12.3 billion. Exports to France fell 6.4 percent and shipments to Italy were off 2.8 percent.

___

General Administration of Customs of China (in Chinese): www.customs.gov.cn

National Bureau of Statistics (in Chinese): www.stats.gov.cn

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Asian shares, euro pause ahead of ECB decision

TOKYO (Reuters) - Asian shares and the euro paused from recent gains on Thursday, as investors awaited the European Central Bank's policy meeting later in the day and President Mario Draghi's view on euro zone growth prospects, optimistic that the worst may be over.

"Risk assets traded heavily as market participants exercise caution ahead of the ECB, particularly with Europe's political crisis hampering sentiment," said Stan Shamu, market strategist at IG Markets. "There has been growing talk of currency wars lately and some are now saying the eurozone will soon consider a fixed rate for the single currency."

European markets are seen in tight ranges, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open flat to up 0.1 percent. A 0.1 percent drop in U.S. stock futures suggested a soft Wall Street start. <.l><.eu><.n/>

Japan's Nikkei stock average <.n225> ended down 0.9 percent, retreating from its highest level since October 2008 that it scaled on Wednesday as investors took a break from selling the yen. <.t/>

But shorter-dated Japanese government debt rallied, sending 5-year government bond yields to a record low of 0.135 percent and 5-year yields to their lowest since September 2002 at 0.030 percent, on expectations that the central bank will cut interest rates to zero.

The yen's broad weakness has been driven by expectations for radical reflationary policy from the Bank of Japan, under Prime Minister Shinzo Abe's push for a mix of anti-deflation policies.

"Hopes for 'Abenomics' are supporting the mood, but investors are also sensitive to the currency moves, so right now, even slight uncertainty on Europe can be a reason to pull back," said Hiroichi Nishi, an assistant general manager at SMBC Nikko Securities.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was down 0.1 percent near a one-week low, after reaching a 18-month high on Monday.

Shanghai shares <.ssec> were set to break an eight-day rising streak, as investors booked profits on Chinese financials after the central bank stressed the need to tackle inflation and speculative housing demand.

Australian shares gained 0.3 percent, outperforming their Asian peers, on a rise in index heavyweights National Australia Bank and Telstra Corp which reported higher earnings. Australian headline job figures for January beat market expectations.

Recent data suggesting a moderate global economic recovery, even if it lacked strong momentum, underpinned industrial metals, keeping London copper prices near four-month highs and platinum and palladium near their highest level in 17 months on hopes of improved demand.

Data from deflation-swamped Japan was also positive, with the country's core machinery orders surging unexpectedly in December for a third straight month of increases, with firms expecting further improvement in the first quarter.

But analysts said Asian economies were still relying on exports to power their way to growth.

"One of the pillars of our bullish view on Asian currencies at the start of the year was the theme of global rebalancing, in which Asian economies would move away from export-dependent growth models towards a more domestic demand-driven model, allowing their currencies to appreciate to dampen their export competitiveness in favor of stronger terms of trade," said Morgan Stanley in a research note.

"However, Asian economies have been slower in the rebalancing process than we had envisioned, as seen by the heavy physical and verbal FX intervention this year."

FATE OF DRAGHI MAGIC

Growing optimism that the euro zone economy may be nearing a bottom has propelled the euro to a 14-1/2-month high against the dollar, a 34-month peak against the yen and 15-month top on sterling.

The ECB is expected to keep interest rates at a record low 0.75 percent at later on Thursday. Traders will focus on any comments about the euro's recent strength as well as the bank's view on the euro zone economy.

Vassili Serebriakov, strategist at BNP Paribas, said the ECB will likely reason that the euro's strength is due to real improvement in the financial markets and economic outlook, and thus does not warrant immediate action.

Draghi's strong verbal commitment to defend the euro and the ECB's new bond-buying scheme to help ease funding strains in highly-indebted euro zone members had significantly reduced risks of the region crumbling under the weight of its debt woes.

But a corruption scandal in Spain and uncertainty over the outcome of an Italian election later this month brought market focus back to the region's potential political instability.

"The scandal stirs memories of past scandals, and there's the possibly that it, too, could become a bigger matter, so this is making some investors cautious," said Kimihiko Tomita, head of forex at State Street in Tokyo.

The euro steadied around $1.3526, off a 14-1/2-month high against the dollar of $1.3711 hit last week.

The dollar eased 0.1 percent to 93.57 yen after touching 94.075 yen, its highest since May 2010 on Wednesday. The euro steadied at 126.60 yen, off Wednesday's 127.71 yen, its strongest since April 2010.

U.S. crude rose 0.1 percent to $96.76 a barrel and Brent also added 0.2 percent to $116.90.

(Additional reporting by Ayai Tomisawa and Lisa Twaronite in Tokyo; Editing by Sanjeev Miglani and Eric Meijer)

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Asian shares, industrial commods recover on economic optimism

TOKYO (Reuters) - Nascent global economic recovery buoyed risk assets from Asian shares to industrial commodities on Wednesday, while the prospect of a dovish new governor for the Bank of Japan sent the yen to a three-year low.

The signs of a recovery taking hold in Europe, the United States and China have helped improve the demand outlook for oil, copper and platinum while a solid reading for euro zone business activity supported the euro.

The slide in the yen bolstered Japanese equities to their highest since October 2008 while expectations of more monetary easing pushed two-year Japanese government bond yields down to a nine-year low of 0.045 percent.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> added 0.3 percent, tracking a more than 1 percent gain overnight in the Standard & Poor's 500 Index <.spx> and the Nasdaq Composite Index <.ixic> on data showing the U.S. services sector extended a three-year expansion in January.

In Asia, investors have been quick to book profits as prices approached their highs, but analysts and traders say any dip was likely to be seen as a chance to buy back into the market.

The pan-Asian index scaled a 18-month high on Monday, and was up about 2.3 percent so far this year, still modest compared to the S&P's nearly 6 percent gain in the same period.

Australian shares <.axjo> rose 0.8 percent, leading regional peers.

"Investors are positioning themselves for further upside moves while global economic data provides cause for optimism," said Tim Waterer, senior trader at CMC Markets.

Brent crude futures were up 0.1 percent to $116.64 a barrel, while U.S. crude was steady at $96.65, hovering near a 20-week high.

London copper rose 0.3 percent to $8,291.25 a tonne after nearing a four-month high of $8,322, while platinum hit a four-month high of $1,714.75 an ounce.

European markets are seen inching higher, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open flat to up 0.1 percent. A 0.1 percent gain in U.S. stock futures suggested a firm open on Wall Street. <.l><.eu><.n/>

YEN TAKES CENTRE STAGE

Expectations for stronger reflationary policies from the Band of Japan intensified after BOJ Governor Masaaki Shirakawa said he would step down on March 19, three weeks earlier than the official end of his five-year term, leaving at the same time as his two deputies. His decision raised the prospect that the next BOJ governor will more readily adopt the expansionist monetary policy demanded by Prime Minister Shinzo Abe.

The dollar touched 94.075 yen to its highest since May 2010, while the euro also rose to 127.71 yen, its strongest since April 2010. The Aussie reached a 4-1/2 year peak around 97.42 yen. The pound touched a 3-year high near 147.25 yen.

Japan's benchmark Nikkei stock average <.n225> soared 3.8 percent to close at a 52-month high. <.t/>

"The momentum in Japan is continuing to favour yen weakening and a risk-on mood," said Stefan Worrall, director of cash equity sales at Credit Suisse in Tokyo.

Despite recent rallies, the Nikkei remains below levels before the 2008 financial crisis while the S&P 500 and Germany's benchmark stock index have both already exceeded that level.

EURO ALSO RESILIENT

The euro was steady around $1.3570, above a key technical support of its 14-day moving average at $1.34653.

The euro drew support from growing confidence in the region's economy and improving funding conditions for deeply-indebted euro zone members.

News the European Central Bank's balance sheet fell to an 11-month low of 2.8 trillion euros ($3.8 trillion) as markets unwound some of the ECB's crisis funding measures underpinned the euro, appearing in stark contrast to the U.S. Federal Reserve and the BOJ which keep expanding asset buying.

"Flows matter more than stock in currency markets when comparing central bank balance sheets ... highlighting the euro's outperformance over the last few months," said Ashraf Laidi, chief global strategist at City Index, in a note to clients.

The ECB is expected to keep interest rates unchanged at its policy meeting on Thursday, but its president may face a grilling over an Italian banking scandal.

Spanish and Italian yields fell on Tuesday after jumping on worries over a corruption scandal in Spain and polls showing Italy's former prime minister Silvio Berlusconi regaining ground before elections this month.

The yen's fall lifted benchmark Tokyo gold futures to a record high of 5,067 yen per gram on Wednesday.

(Additional reporting by Thuy Ong in Sydney and Ayai Tomisawa and Sophie Knight in Tokyo; Editing by Sanjeev Miglani and Eric Meijer)

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Asian shares drop on euro zone worry, soft U.S. data

TOKYO (Reuters) - Asian shares, oil and the euro fell on Tuesday as investors took profits from recent rallies, while the yen got a respite from broad-based selling.

European markets are seen barely changed, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open up nearly flat. But a 0.1 percent gain in U.S. stock futures suggested a firm open on Wall Street. <.l><.eu><.n/>

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> tumbled 0.9 percent, dragged lower by a steep 1.7 percent fall in Hong Kong shares <.hsi>. The pan-Asian index climbed to a 18-month high on Monday.

Japan's benchmark Nikkei stock average <.n225> closed down 1.9 percent, after scaling a 33-month high on Monday. <.t/>

Positive data from China failed to brighten the bearish mood, after the Standard & Poor's 500 Index <.spx> had its worst day since November on Monday on discouraging U.S. factory orders and worries that a potential political shake-up could disrupt the euro zone's efforts to resolve its debt crisis.

Analysts and traders said selling was a correction to markets rallying on receding tail risks such as growing euro zone stability and an improving global economic outlook, while global monetary easing still underpinned sentiment.

"This move in equities ... looks to be a healthy correction, nothing more," said Richard Yetsenga, Head of Global Markets at ANZ Research, adding that downside risk would likely convince major central banks globally to stick to easy policy.

In China, the HSBC services purchasing managers' index rose to a four-month high of 54 in January from December's 51.7, underlining confidence in the world's second-biggest economy, which is expected to grow 8.1 percent this year, off a 13-year low of 7.8 percent hit in 2012.

"The data globally is unquestionably better but the recovery still seems gradual. (China) hit the bottom and they had a bit of a bounce but nothing much else happened. We don't really seem to have preconditions for a much stronger bounce than that (8 percent growth)," Yetsenga said.

The Australian dollar fell 0.3 percent to $1.0405 after the Reserve Bank of Australia kept its cash rate steady at 3.0 percent, as expected, having just cut in December. Australian shares <.axjo> fell 0.5 percent but trimmed some earlier losses after the RBA's rate decision.

The euro took the brunt of renewed focus on the euro zone problems, having risen 2.3 percent so far this year against the U.S. dollar, up about 5.4 percent against sterling and 1.8 percent higher against the Australian dollar.

The euro eased 0.2 percent to $1.3485, retreating further from Friday's 14-1/2-month peak of $1.3711, ahead of the European Central Bank's policy meeting on Thursday.

"Markets have been increasingly comfortable with European risks over the past few months and are largely not positioned for this increase in political problems. The outcomes in Spain and Italy are far from certain and may represent stumbling blocks for further expansion in risk appetite," Barclays Capital said in a research note.

Spain's opposition party on Sunday called for Prime Minister Mariano Rajoy to resign over corruption allegations, which Rajoy denies, pushing Spanish 10-year bond yields to six-week highs.

In Italy, 10-year Italian government bond yields hit their highest since late December, as chances of former prime minister Silvio Berlusconi regaining power raised worries about Rome's ability to fix its fiscal problems.

The yen took a breather, firming from lows against a broad range of currencies.

The dollar steadied at 92.36 yen after scaling its highest since May 2010 of 93.185 on Monday, while the euro eased 0.1 percent to 124.53 yen, off its loftiest since April 2010 of 126.97 hit on Friday.

"Markets are broadly undergoing a correction and the euro is definitely facing profit-taking, given the pace of its climb. Worries about the euro zone debt crisis always remain a downside risk for the euro, and could push it lower to $1.32-$1.33," said Hiroshi Maeba, head of FX trading Japan at UBS in Tokyo. "But the trend is still upward for dollar/yen, cross/yen. The dollar could reach 95 yen by the end of the month."

As long as markets hold out expectations for the Bank of Japan to implement aggressive monetary easing to beat decades of deflation in Japan, the yen will stay pressured. Any correction to the dollar's rise against the yen was also be seen as shallow, with many traders and analysts seeing a firm floor around 87-88 yen.

Italy & Spain bond yields: http://link.reuters.com/gat45t

Asset returns in 2013: http://link.reuters.com/dub25t

China, EU, US Services PMI: http://link.reuters.com/dyh85s

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Asian credit markets faltered with the plunge in equities, widening the spread on the iTraxx Asia ex-Japan investment-grade index by three basis points.

Brent crude slipped towards $115 per barrel, giving up some of its gains from the last three weeks, on renewed euro zone worries and a slightly firmer dollar.

(Editing by Eric Meijer)

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Asian shares advance after U.S. jobs, ISM

TOKYO (Reuters) - Asian shares climbed to 18-month highs on Monday after U.S. data showed some promise of a credible recovery but not strong enough to threaten the Federal Reserve's easing plans, while momentum also gained on firmer manufacturing data from Europe and China.

The yen took a break from heavy selling against the U.S. dollar and the euro, but fell to its lowest since August 2008 against the Australian and New Zealand dollars early on Monday on confidence of bold monetary support from the Bank of Japan to overcome the country's stubborn deflation.

More confidence in global economic recovery underpinned oil and copper prices while weighing on safe-haven assets, pushing 10-year U.S. Treasury yields to a nine-month high and 10-year Japanese government bond yields to a three-week high.

European markets are likely to inch higher, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open up by around 0.1 percent. U.S. stock futures were little changed, pointing to a steady open on Wall Street. <.l><.eu><.n/>

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> rose 0.6 percent.

"Prices of risk assets are generally expected to face upward pressures," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory. "While risk appetite is returning, prices may become top-heavy for some commodities markets where the relative strength index suggests an overbought territory under the current economic environment."

Brent crude eased 0.2 percent to $116.48 a barrel but held above $116, near a more than four-month high, as data from top consumers United States and China reinforced a view that the global economy was headed for a modest uptick this year.

"We are now seeing a consistent story of moderate growth in the U.S. and China, which is supportive of oil prices in general," said Ric Spooner, chief market analyst at CMC Markets in Sydney. "This will probably be a week of consolidation."

U.S. data out on Friday showed payrolls rose modestly last month, with upward revisions for November and December, while the Institute for Supply Management said its index of national factory activity rose to its highest since April.

China followed with positive news over the weekend, saying growth in its official purchasing managers' index (PMI) for the non-manufacturing sector ticked up in January for the fourth straight monthly rise, confirming the world's second-largest economy was showing a modest recovery.

Australian shares <.axjo>, however, lost their grip on early gains to end 0.3 percent lower, pulled down by weaker-than-expected housing data, slow job advertising and technical resistance. They jumped 0.9 percent to a 21-month high on Friday.

NIKKEI MAY BE PEAKING

Japan's benchmark Nikkei stock average <.n225> rose 0.6 percent after climbing to a fresh 33-month high earlier as the yen declined. The index climbed for a fifth straight day. <.t/>

Nikkei has been moving in tandem with the yen's two-month-long losing streak with investors eyeing the change in the BOJ's top personnel in April for clues to the likely extent of the bank's reflationary measures.

"The Nikkei may be nearing its peak for now as we may get a specific name of the most likely candidate for the next BOJ governor soon. That may provide an opportunity to close long dollar/yen positions, while a firming yen will then likely spur investors to book profits on Japanese stocks," said Tetsuro Ii, the chief executive of Commons Asset Management.

The dollar eased 0.2 percent to 92.64 yen after scaling its highest since May 2010 of 92.97 on Friday, while the euro fell 0.3 percent to 126.26 yen, still near its loftiest since April 2010 of 126.97 touched on Friday.

In early Monday trade, the yen plunged to its lowest since August 2008 against both the Australian dollar, at 96.78 yen, and against the New Zealand dollar at 78.74 yen.

The euro inched down 0.1 percent to $1.3628, off Friday's 14-1/2-month peak of $1.3711 hit after data showed euro zone factories had their best month in January in nearly a year.

On Friday, the dollar index measured against a basket of key currencies fell to a 4-1/2-month low of 78.918 <.dxy>. The index was up 0.2 percent on Monday.

As economic optimism rose and concerns about the euro zone's debt difficulties eased, investors took on more risk.

Research provider TrimTabs Investment Research said on Saturday investors poured a record $77.4 billion in new cash into stock mutual funds and exchange-traded funds in January, surpassing the previous monthly record of $53.7 billion in February 2000.

With the rise in equities on recovering appetite for riskier assets, safe-haven appeal waned, pushing up yields of U.S. Treasury bonds. The U.S. 10-year Treasury yield hit a nine-month high of 2.052 percent in Asia on Monday.

A weekly gauge of sentiment in the Japanese government bond market deteriorated sharply, remaining in negative territory for a fifth straight week as rising global appetite for risk sapped demand for bonds, the latest Reuters poll showed on Monday.

(Additional reporting by Ramya Venugopal in Singapore; Editing by Eric Meijer)

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Battle-Scarred Skull of Suspected King Richard III Revealed

A battle-scarred skull discovered beneath a parking lot in England could be that of King Richard III, who died in battle in 1485.

The University of Leicester released the skull image — the first photo of the human remains that may belong to the English monarch — ahead of a big announcement on the identity of the bones, scheduled for Monday (Feb. 4) morning.

“The skull was in good condition, although fragile, and was able to give us detailed information about this individual,” Jo Appleby, an archaeologist at the University of Leicester, said in a statement.

Archaeologists had unearthed the skeleton, including its skull, last year in the choir of what was the medieval church Grefriars, which had been buried under a parking lot. Historical records suggested King Richard III was buried there after he died at the Battle of Bosworth Field, during the War of the Roses, an English civil war.

To get as close a look as possible at the skull, and find out whether it once held the English crown, researchers used computed tomography (CT) scanning.

“In order to determine whether this individual is Richard III we have built up a biological profile of its characteristics. We have also carefully examined the skeleton for traces of a violent death,” Appleby said. [See Images of the Skull & Search for Richard III's Grave]

Skeletal signs

Appleby and colleagues had good reasons to think the remains came from the famous king, best known through William Shakespeare’s fictional account of him in “Richard III.” For instance, not only was the skeleton male, it was found in the church choir area where historical records would suggest Richard III was buried. The skull also showed signs of being wounded, as if it were cut clean off his body with an axe or sword, something consistent with a battle death.

Scientists also found a barbed arrowhead in the skeleton’s spine, which showed signs of scoliosis. Such an abnormally curved spine would’ve made its owner’s right shoulder sit higher than the left, matching contemporary portrayals of Richard III. However, unlike some later accounts, the king was not a hunchback.

The CT scans will allow scientists to create a 3-D image of the body, over which they can place flesh; same goes for the skull, which the team plans to reconstruct to show what the man’s face would’ve looked like, though this procedure can be somewhat unreliable. The team also said they would analyze any DNA recovered from the bones. Such results could then be compared to those of a direct descendant of Richard’s sister, who was uncovered by John Ashdown-Hill, author of “The Last Days of Richard III.” From those remains, scientists have mitochondrial DNA, or the DNA inside the cell’s energy-making structures, which gets passed down only by mothers.

Strange tales

Richard III ruled from 1483 to 1485, becoming the last English king to die in battle. Though it was known the king was buried at the Franciscan Friary (known as Greyfriars) in Leicester, the grave and church itself were eventually lost. Even so, interest in the king led to some far-fetched grave tales about the grave’s whereabouts, including one purporting the bones were thrown into the Soar River. “Other fables, equally discredited, claimed that his coffin was used as a horse-trough,” Philippa Langley, a Richard III Society member, said in a statement.

The researchers started digging beneath the Leicester City Council parking lot on Aug. 25. Since then, they have found the church and a 17th-century garden marked by paving stones. Records suggest mayor of Leicester Robert Herrick built a mansion and garden on the medieval church site years after the king’s death, reportedly placing in the garden a stone pillar inscribed with, “Here lies the body of Richard III sometime King of England.” [10 Weirdest Ways We Deal With the Dead]

If the bones turn out to belong to King Richard III, where will they be re-interred? The University of Leicester has jurisdiction over the remains, and had said last year the remains would be buried under Leicester Cathedral.

However, other interested parties have their own opinions: The Richard III Foundation and the Society of Friends of Richard III, based in York, England, argue the remains should be reburied in York, since the king was fond of that city. The Richard III Society has remained officially neutral. Meanwhile, some online petitions have argued the reburial should take place at Westminster Abbey or Windsor Castle.

“If the identity of the remains is confirmed, Leicester Cathedral will continue to work with the Royal Household, and with the Richard III Society, to ensure that his remains are treated with dignity and respect and are reburied with the appropriate rites and ceremonies of the church,” the Very Reverend Vivienne Faull, the Dean of Leicester, said in a statement.

Follow LiveScience on Twitter @livescience. We’re also on Facebook & Google+.

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"Great Rotation"- A Wall Street fairy tale?

NEW YORK (Reuters) - Wall Street's current jubilant narrative is that a rush into stocks by small investors has sparked a "great rotation" out of bonds and into equities that will power the bull market to new heights.

That sounds good, but there's a snag: The evidence for this is a few weeks of bullish fund flows that are hardly unusual for January.

Late-stage bull markets are typically marked by an influx of small investors coming late to the party - such as when your waiter starts giving you stock tips. For that to happen you need a good story. The "great rotation," with its monumental tone, is the perfect narrative to make you feel like you're missing out.

Even if something approaching a "great rotation" has begun, it is not necessarily bullish for markets. Those who think they are coming early to the party may actually be arriving late.

Investors pumped $20.7 billion into stocks in the first four weeks of the year, the strongest four-week run since April 2000, according to Lipper. But that pales in comparison with the $410 billion yanked from those funds since the start of 2008.

"I'm not sure you want to take a couple of weeks and extrapolate it into whatever trend you want," said Tobias Levkovich, chief U.S. equity strategist at Citigroup. "We have had instances where equity flows have picked up in the last two, three, four years when markets have picked up. They've generally not been signals of a continuation of that trend."

The S&P 500 rose 5 percent in January, its best month since October 2011 and its best January since 1997, driving speculation that retail investors were flooding back into the stock market.

Heading into another busy week of earnings, the equity market is knocking on the door of all-time highs due to positive sentiment in stocks, and that can't be ignored entirely. The Standard & Poor's 500 Index <.spx> ended the week about 4 percent from an all-time high touched in October 2007.

Next week will bring results from insurers Allstate and The Hartford , as well as from Walt Disney , Coca-Cola Enterprises and Visa .

But a comparison of flows in January, a seasonal strong month for the stock market, shows that this January, while strong, is not that unusual. In January 2011 investors moved $23.9 billion into stock funds and $28.6 billion in 2006, but neither foreshadowed massive inflows the rest of that year. Furthermore, in 2006 the market gained more than 13 percent while in 2011 it was flat.

Strong inflows in January can happen for a number of reasons. There were a lot of special dividends issued in December that need reinvesting, and some of the funds raised in December tax-selling also find their way back into the market.

During the height of the tech bubble in 2000, when retail investors were really embracing stocks, a staggering $42.7 billion flowed into equities in January of that year, double the amount that flowed in this January. That didn't end well, as stocks peaked in March of that year before dropping over the next two-plus years.

MOM AND POP STILL WARY

Arguing against a 'great rotation' is not necessarily a bearish argument against stocks. The stock market has done well since the crisis. Despite the huge outflows, the S&P 500 has risen more than 120 percent since March 2009 on a slowly improving economy and corporate earnings.

This earnings season, a majority of S&P 500 companies are beating earnings forecast. That's also the case for revenue, which is a departure from the previous two reporting periods where less than 50 percent of companies beat revenue expectations, according to Thomson Reuters data.

Meanwhile, those on the front lines say mom and pop investors are still wary of equities after the financial crisis.

"A lot of people I talk to are very reluctant to make an emotional commitment to the stock market and regardless of income activity in January, I think that's still the case," said David Joy, chief market strategist at Columbia Management Advisors in Boston, where he helps oversee $571 billion.

Joy, speaking from a conference in Phoenix, says most of the people asking him about the "great rotation" are fund management industry insiders who are interested in the extra business a flood of stock investors would bring.

He also pointed out that flows into bond funds were positive in the month of January, hardly an indication of a rotation.

Citi's Levkovich also argues that bond investors are unlikely to give up a 30-year rally in bonds so quickly. He said stocks only began to see consistent outflows 26 months after the tech bubble burst in March 2000. By that reading it could be another year before a serious rotation begins.

On top of that, substantial flows continue to make their way into bonds, even if it isn't low-yielding government debt. January 2013 was the second best January on record for the issuance of U.S. high-grade debt, with $111.725 billion issued during the month, according to International Finance Review.

Bill Gross, who runs the $285 billion Pimco Total Return Fund, the world's largest bond fund, commented on Twitter on Thursday that "January flows at Pimco show few signs of bond/stock rotation," adding that cash and money markets may be the source of inflows into stocks.

Indeed, the evidence suggests some of the money that went into stock funds in January came from money markets after a period in December when investors, worried about the budget uncertainty in Washington, started parking money in late 2012.

Data from iMoneyNet shows investors placed $123 billion in money market funds in the last two months of the year. In two weeks in January investors withdrew $31.45 billion of that, the most since March 2012. But later in the month money actually started flowing back.

(Additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

Read More..

Winter’s Halftime Kicks Off on Super Bowl Sunday

As many weather-minded people may know, Groundhog Day occurred Saturday (Feb. 2), when winter’s fate is decided by a groundhog’s perception of its shadow. But in actuality, winter’s midpoint in the Northern Hemisphere occurs today: Super Bowl Sunday.

According to folklore, if it is cloudy when the groundhog Punxsutawney Phil emerged from its burrow on Saturday, it would leave the burrow, signifying that winter will soon end. If it is sunny, the groundhog will supposedly “see its shadow” and retreat back into its burrow, and winter will continue for six more weeks. But Phil did not see his shadow early Saturday, suggesting an early spring is right around the corner.

Saturday was also Candlemas, once regarded as the first of the four “cross-quarter” days of the year or the middle of the winter season, halfway between the December solstice and the March equinox. 

The true midpoint of winter, however, will occur today at 6:07 p.m. EST (2307 GMT), just 23 minutes before kickoff of Super Bowl XLVII. Although the altitude of the Sun has been slowly climbing and the length of daylight has been increasing since the winter solstice on Dec. 21, any changes up to this point have been relatively subtle. 

For example: On the first day of winter at Portland, Maine, sunset occurred at 4:07 p.m. and the length of daylight (from sunrise to sunset) reached a minimum of 8 hours and 57 minutes. On “Super Sunday” – winter’s midpoint — the sun will set at 4:55 p.m. with only 64 additional minutes of daylight having accumulated since Dec. 21. [In Images: Extreme Weather Around the World]

But as an old and true New England proverb notes: “As the days lengthen, the cold strengthens.” And as most people who live in the United States, southern Canada and much of Europe will attest this particular winter season, the thermometer appears to be reluctant to respond to the increasing solar altitude.  Indeed, that extra hour of daylight is not enough to give us any sense of warmth; while the days have gradually become longer, the bitterness of winter with its attendant ice and snow is still the same.

Still, it’s in the second half of winter that the effects of the northward shift of the sun’s direct rays start becoming much more noticeable. In fact, by March 20 — the date of the vernal equinox — the length of daylight will have increased by 2 hours and 19 minutes since Feb. 3. And because daylight saving time begins on March 10 this year, by March 20, the sun will be setting just seven minutes shy of 7 p.m. 

Interestingly, for many northern locales, long-term records indicate the first four days of February are the coldest of the winter. But average daily temperatures rise rapidly thereafter, so that by the last week of the month they are higher than any day in January. Meteorologists, in fact, consider that the winter season is over at the end of February; they consider “meteorological winter” to be defined by the three coldest months of the year: December, January and February. 

So for all those winter weary souls, take heart: In the days and weeks to come, you’ll more readily be able to sense the greater amounts of daily light and see the more northerly position of the afternoon sunsets on the horizon.  And soon the weather will correspondingly respond as well. 

So, take heed that while “Super Sunday” marks the halfway point of winter, that we’re also about to turn the corner so to speak, both astronomically and meteorologically. And regardless of what your local groundhog or woodchuck forecast early on Saturday morning, spring is well on its way.

Joe Rao serves as an instructor and guest lecturer at New York’s Hayden Planetarium. He writes about astronomy for The New York Times and other publications, and he is also an on-camera meteorologist for News 12 Westchester, New York.

Copyright 2013 SPACE.com, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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"Great Rotation"- A Wall Street fairy tale?

NEW YORK (Reuters) - Wall Street's current jubilant narrative is that a rush into stocks by small investors has sparked a "great rotation" out of bonds and into equities that will power the bull market to new heights.

That sounds good, but there's a snag: The evidence for this is a few weeks of bullish fund flows that are hardly unusual for January.

Late-stage bull markets are typically marked by an influx of small investors coming late to the party - such as when your waiter starts giving you stock tips. For that to happen you need a good story. The "great rotation," with its monumental tone, is the perfect narrative to make you feel like you're missing out.

Even if something approaching a "great rotation" has begun, it is not necessarily bullish for markets. Those who think they are coming early to the party may actually be arriving late.

Investors pumped $20.7 billion into stocks in the first four weeks of the year, the strongest four-week run since April 2000, according to Lipper. But that pales in comparison with the $410 billion yanked from those funds since the start of 2008.

"I'm not sure you want to take a couple of weeks and extrapolate it into whatever trend you want," said Tobias Levkovich, chief U.S. equity strategist at Citigroup. "We have had instances where equity flows have picked up in the last two, three, four years when markets have picked up. They've generally not been signals of a continuation of that trend."

The S&P 500 rose 5 percent in January, its best month since October 2011 and its best January since 1997, driving speculation that retail investors were flooding back into the stock market.

Heading into another busy week of earnings, the equity market is knocking on the door of all-time highs due to positive sentiment in stocks, and that can't be ignored entirely. The Standard & Poor's 500 Index <.spx> ended the week about 4 percent from an all-time high touched in October 2007.

Next week will bring results from insurers Allstate and The Hartford , as well as from Walt Disney , Coca-Cola Enterprises and Visa .

But a comparison of flows in January, a seasonal strong month for the stock market, shows that this January, while strong, is not that unusual. In January 2011 investors moved $23.9 billion into stock funds and $28.6 billion in 2006, but neither foreshadowed massive inflows the rest of that year. Furthermore, in 2006 the market gained more than 13 percent while in 2011 it was flat.

Strong inflows in January can happen for a number of reasons. There were a lot of special dividends issued in December that need reinvesting, and some of the funds raised in December tax-selling also find their way back into the market.

During the height of the tech bubble in 2000, when retail investors were really embracing stocks, a staggering $42.7 billion flowed into equities in January of that year, double the amount that flowed in this January. That didn't end well, as stocks peaked in March of that year before dropping over the next two-plus years.

MOM AND POP STILL WARY

Arguing against a 'great rotation' is not necessarily a bearish argument against stocks. The stock market has done well since the crisis. Despite the huge outflows, the S&P 500 has risen more than 120 percent since March 2009 on a slowly improving economy and corporate earnings.

This earnings season, a majority of S&P 500 companies are beating earnings forecast. That's also the case for revenue, which is a departure from the previous two reporting periods where less than 50 percent of companies beat revenue expectations, according to Thomson Reuters data.

Meanwhile, those on the front lines say mom and pop investors are still wary of equities after the financial crisis.

"A lot of people I talk to are very reluctant to make an emotional commitment to the stock market and regardless of income activity in January, I think that's still the case," said David Joy, chief market strategist at Columbia Management Advisors in Boston, where he helps oversee $571 billion.

Joy, speaking from a conference in Phoenix, says most of the people asking him about the "great rotation" are fund management industry insiders who are interested in the extra business a flood of stock investors would bring.

He also pointed out that flows into bond funds were positive in the month of January, hardly an indication of a rotation.

Citi's Levkovich also argues that bond investors are unlikely to give up a 30-year rally in bonds so quickly. He said stocks only began to see consistent outflows 26 months after the tech bubble burst in March 2000. By that reading it could be another year before a serious rotation begins.

On top of that, substantial flows continue to make their way into bonds, even if it isn't low-yielding government debt. January 2013 was the second best January on record for the issuance of U.S. high-grade debt, with $111.725 billion issued during the month, according to International Finance Review.

Bill Gross, who runs the $285 billion Pimco Total Return Fund, the world's largest bond fund, commented on Twitter on Thursday that "January flows at Pimco show few signs of bond/stock rotation," adding that cash and money markets may be the source of inflows into stocks.

Indeed, the evidence suggests some of the money that went into stock funds in January came from money markets after a period in December when investors, worried about the budget uncertainty in Washington, started parking money in late 2012.

Data from iMoneyNet shows investors placed $123 billion in money market funds in the last two months of the year. In two weeks in January investors withdrew $31.45 billion of that, the most since March 2012. But later in the month money actually started flowing back.

(Additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

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Asteroid to Give Earth Record-Setting Close Shave on Feb. 15

An asteroid half the size of a football field will give Earth the ultimate close shave this month, passing closer than many satellites when it whizzes by, but it won’t hit the planet, NASA scientists say.

The asteroid 2012 DA14 will fly by Earth on Feb. 15 and zip within 17,200 miles (27, 680 kilometers) of the planet during the cosmic close encounter. The asteroid will approach much closer to Earth than the moon, and well inside the paths of navigation and communications satellites.

“This is a record-setting close approach,” Don Yeomans, the head of NASA’s asteroid-tracking program, said in a statement. “Since regular sky surveys began in the 1990s, we’ve never seen an object this big get so close to Earth.”

Asteroid 2012 DA14 was discovered last year by an amateur team of stargazers at the La Sagra Sky Survey observatory in Spain. Yeomans  stressed that, while the asteroid’s approach bring it closer than the geosynchronous satellites  orbiting 22,245 miles (35,800 km) above Earth, 2012 DA14 poses no threat of a deadly collision with the planet. [See Don Yeomans Explain Asteroid 2012 DA14 (Video)]

“2012 DA14 will definitely not hit Earth. The orbit of the asteroid is known well enough to rule out an impact,” Yeomans, who heads the Near-Earth Object Program at NASA’s Jet Propulsion Laboratory in Pasadena, Calif. He added that the odds it will slam into a satellite are “extremely remote.”

A fairly typical asteroid like 2012 DA14 — which measures 150 feet (45 meters) across — zips by Earth about every 40 years, but only strikes every 1,200 years, Yeomans estimated, and the impact of such an object would not be catastrophic over a wide area.

Asteroid 2012 DA14 is about the same size of the object that exploded in the atmosphere above Siberia in 1908, leveling hundreds of square miles in what scientists now call the “Tunguska Event,” NASA officials explained.

Yeomans said an asteroid similar in size to 2012 DA14 slammed into Earth 50,000 years ago to create the famed Meteor Crater in Arizona. But the Meteor Crater asteroid was made of iron, which made its impact especially strong.

When asteroid 2012 DA14 zooms by Earth, NASA scientists will be tracking the space rock closely. The space agency plans to use its Goldstone radar in California’s Mojave Desert to follow the asteroid from Feb. 16 to Feb. 20. The observation campaign should help astronomers build a 3D map asteroid 2012 DA14, as well as refine estimates on the space rock’s shape, spin and reflectivity, NASA officials said.

Since the object will be moving across the sky so fast, only the most experienced amateur astronomers are likely to catch its close pass. But it could be a challenge.

“The asteroid will be racing across the sky, moving almost a full degree (or twice the width of a full moon) every minute,” Yeomans said. “That’s going to be hard to track.”

Follow SPACE.com on Twitter @Spacedotcom. We’re also on Facebook and Google+.

Copyright 2013 SPACE.com, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Asian shares steady; regional PMI data dampens mood

TOKYO (Reuters) - Asian shares were on the defensive on Friday after a series of surveys on factory output signaled a tough outlook for the region's manufacturers, though Japanese equities were a notable exception, logging their longest winning run in 54 years on a weaker yen.

European markets are likely to inch higher, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open up as much as 0.2 percent.

A 0.3 percent rise in U.S. stock futures suggested a firmer open on Wall Street. <.l><.eu><.n/>

Several surveys on Friday suggested Asia's manufacturers face a challenging business climate in the coming months, with China's vast factory sector managing only a shallow rebound at the start of 2013 as feeble foreign demand dragged on sales.

Two separate surveys of China's purchasing managers' index (PMI) showed that factory output in the world's second-biggest economy rose in January, but the pace of the revival in activity was uneven.

China's official PMI logged a reading of 50.4, easing from December's 50.6 and below forecasts for a nine-month high of 50.9. A separate private sector PMI released by HSBC, however, rose to a two-year high of 52.3.

"It seems new orders for exports have declined even when new orders overall rose, suggesting that infrastructure spending and other investment to spur domestic demand is needed to keep (China's) economy growing," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory.

"But it's not going to change the view about the Chinese economy recovering. The official data was just neither good nor bad."

Other PMI releases showed manufacturing growth slowed or stalled in India and South Korea, while factories in Indonesia said business shrank in January from December for the first time in eight months.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was little changed by mid-afternoon after swinging up and down 0.2 percent during the day. It was set for a weekly gain of 0.6 percent and 2.6 percent so far this year.

A 0.9 percent jump to a 21-month high in resources-reliant Australian shares <.axjo> helped the pan-Asian index out of the negative territory, but weak Hong Kong shares <.hsi> capped the index.

The commodity-linked Australian dollar fell 0.3 percent to session lows around $1.0382.

"Australia is a high-yielding country and there are a lot of foreign funds coming here and that is supporting the market," said Macquarie Equities division director Lucinda Chan.

Investors' focus now turns to the U.S. nonfarm payrolls report, which will likely show a rise of 160,000 jobs and the jobless rate staying steady at 7.8 percent.

Manufacturing purchasing managers' indexes from the United States and the euro zone, as well as the Institute for Supply Management's manufacturing index, are also due later in the session.

The euro added 0.3 percent to $1.3623 to the dollar, after earlier reaching a fresh 14-month high of $1.3634. The common currency's strength has pushed the dollar index to a one-month low of 79.078 <.dxy>.

"The euro revival looks set to continue for some time, as investors return to euro zone bond markets, content with the combination of the European Central Bank backstop for sovereign risk and low inflation danger due to lack of economic growth. The dollar bloc looks to be a key loser in the portfolio reallocation back into EUR," Westpac bank said in a note.

Asia official PMI: http://link.reuters.com/baq77s

China PMI: http://link.reuters.com/qaf92t

Asset returns in 2013: http://link.reuters.com/dub25t

S&P 500 vs Treasury yield: http://link.reuters.com/ren65t

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

YEN STILL UNDER PRESSURE, NIKKEI SHINES

Japan's benchmark Nikkei stock average <.n225> closed at a fresh 33-month high, bolstered by the yen's decline to new lows, and logged its 12th straight week of gains, the longest run of weekly gains since 1959. The benchmark index rose 0.5 percent. <.t/>

The dollar advanced further against the yen, up 0.6 percent to 92.25 yen, having earlier hit its highest since June 2010 of 92.27. The euro extended gains, soaring 1 percent to its highest since April 2010 of 125.75.

The yen also plunged to its lowest since August 2008 against both the Australian dollar, at 95.84 yen, and against the New Zealand dollar at 77.58 yen.

"The yen selling is seen as a safe bet because Prime Minister Shinzo Abe has not faltered on his election pledge about beating deflation, highlighting the government's resolve," said Kimihiko Tomita, head of forex at State Street in Tokyo.

Oil and copper prices firmed and the euro extended gains against the dollar, reflecting a recent trend of improving sentiment across asset classes, underpinned by easing stress in the euro zone and a generally positive global economic outlook.

"Chinese data should get stronger into the second quarter. Global indicators are improving, so it makes sense to a certain extent that speculators are taking another look at copper," said analyst Bonnie Liu of Macquarie in Singapore.

London copper added 0.6 percent to $8,213.50 a tonne.

U.S. crude futures inched up 0.1 percent to $97.56 a barrel while Brent hit its highest in over three months at $115.91.

(Additional reporting by Victoria Thieberger in Melbourne and Melanie Burton in Singapore; Editing by Eric Meijer and Shri Navaratnam)

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Arizona challenges EPA on power plant decision

PHOENIX (AP) — Arizona is challenging a federal decision that requires three coal-fired power plants to upgrade pollution controls.

The Arizona Attorney General’s Office asked a federal appeals court Thursday to review the decision from the U.S. Environmental Protection Agency.

The EPA partially approved Arizona air quality plan for the Cholla, Coronado and Apache generating stations. But the agency said the state didn’t do enough to limit nitrogen oxide emissions.

The EPA came up with new limits for most of the units and gave the plants’ operators five years to comply.

State Department of Environmental Quality Director Henry Darwin says Arizona should be making decisions about what’s in the best interest of the state, not the EPA.

Energy News Headlines – Yahoo! News

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Asian shares off highs, Fed's stance weighs on dollar

TOKYO (Reuters) - Asian shares fell slightly on Thursday after rallies to multi-month highs, and longer for some Southeast Asian markets, while the U.S. Federal Reserve's pledge to retain its stimulus policy undermined the dollar.

Sentiment in Asian markets remained underpinned, however, by positive factory output data in Japan, and strong gross domestic product reports from Taiwan and the Philippines.

A weak dollar and signs of stabilization in the euro zone underpinned gold, and expectations that demand will pick up for industrial commodities supported oil and copper prices.

European markets are likely to extend losses, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open down as much as 0.3 percent. A 0.1 percent drop in U.S. stock futures suggested a soft open at Wall Street. <.l><.eu><.n/>

After recent gains that took several markets to multimonth highs, investors appeared to adopt a cautious stance ahead of key data such as China's official manufacturing PMI and U.S. monthly nonfarm payrolls on Friday.

Data on Wednesday showing the U.S. economy unexpectedly contracted in the fourth quarter also crimped demand, but traders were quick to note that the underlying fundamentals of the U.S. GDP report were not as bad as the headline number.

"After many years of fears that the (U.S.) economy is going to crash, it seemed like the worst is behind us. So better news out of China and expectations for recovery in the United States caused risk money to come back into equities, commodities and energy," said Tony Nunan, an oil risk manager at Mitsubishi.

Upbeat economic reports from Asia failed to galvanize buying in regional equities, which have sped to multimonth highs, but the data reinforced optimism about the global economic outlook.

Taiwan raised its economic growth forecast for 2013, after the fourth quarter expanded faster than expected and posted its best growth in five quarters on improved demand for the island's electronics exports and stronger consumption.

The Philippines said on Thursday its economy grew 1.5 percent in the December quarter from the previous three months, better than market forecasts.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> eased 0.4 percent after rising 1.3 percent over the past two sessions to nearly an 18-month high. The index was set for a monthly gain of about 2.5 percent.

Australian shares <.axjo> eased 0.4 percent, pausing after a 10-day winning streak, the longest in more than nine years, which hoisted local shares to 21-month highs.

Southeast Asian stock markets were generally softer but remained near their highs. The Philippines <.psi> hit a record high for the third day running on Wednesday and Thailand's <.seti> market surged to a more than 18-year high on Wednesday.

DOLLAR LANGUISHES

The Federal Reserve on Wednesday kept in place its monthly $85 billion bond-buying stimulus plan, arguing the support was needed to lower unemployment.

The Fed's pledge to support the economy with easy money policies underpinned sentiment, but put the dollar on the defensive.

The dollar languished, easing 0.2 percent to 90.93 yen, off Wednesday's 91.41 yen which was its highest since June 2010. The euro steadied near 123.53 yen, after hitting 123.87 on Wednesday, its peak since May 2010.

A firmer yen weighed on Japan's benchmark Nikkei stock average <.n225>, but the market managed to wipe out earlier losses to close up 0.2 percent at a fresh 33-month high. <.t/>

Japan's December factory output rose at the fastest pace in a year and a half and firms expect further gains, raising hopes that stabilizing global demand and exports will help pull the economy from its slump.

The euro held near a 14-month high of $1.3588 scaled on Wednesday.

"Euro/dollar we now think will rise to $1.37. The euro crosses are also likely to benefit from the return of exiled capital that left the euro zone," said Gareth Berry, G10 FX strategist for UBS in Singapore.

"Europe is not out of the crisis yet, there is still lots of uncertainty out there, but there has been enough stabilization to encourage some investors to return," he added.

Reports from the euro zone on Wednesday showed economic sentiment improving more than expected across all sectors in January and a gauge for the phase of the business cycle also rising this month.

Spot gold hovered near its one-week high of $1,683.39 an ounce reached on Wednesday. A weak yen pushed the most active gold contract on the Tokyo Commodity Exchange to a record high of 4,944 yen a gram on Thursday.

U.S. crude futures steadied around $97.96 a barrel and Brent crude was up to a more than three-month high above $115.

Asian credit markets were weighed by the selling in equities, widening the spread on the iTraxx Asia ex-Japan investment-grade index by 5 basis points.

(Additional reporting by Jessica Jaganathan and Masayuki Kitano in Singapore and Ian Chua in Sydney; Editing by Jacqueline Wong and Shri Navaratnam)

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Golf Weather App

By Chris Morris

PHILADELPHIA (CBS) – On today’s APP-tastic and Outta Site – GolfWeather.

Before you hit the Links, it might be a good idea to see if you’ll get in a full 18. GolfWeather provides hour-by-hour forecasts for over 20,000 courses around the country.

Beyond rain, the app also provides information on cloud cover, humidity and the amount of wind that’s expected. Worst case, you’ll know you have a good excuse when you slice the ball for the third hole in a row.

Check out the GolfWeather app.

Weather News Headlines – Yahoo! News

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Asian shares gain on global recovery outlook

TOKYO (Reuters) - Asian shares advanced on Wednesday as investor confidence in the global economic outlook strengthened on solid U.S. data, giving comfort to investors ahead of the U.S. Federal Reserve's monetary policy decision due later in the session.

Optimism over economic recovery from strong U.S. housing data and China's promising economic growth forecast for 2013 raised expectations for robust demand for fuel and industrial commodities, underpinning oil prices and lifting copper.

European markets are seen pausing after hitting two-year highs, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open nearly flat. A 0.1 percent drop in U.S. stock futures suggested a cautious start on Wall Street. <.l><.eu><.n/>

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> rose 0.4 percent, after rising to near a 18-month high, building on the previous day's 1 percent rally. Gains were led by a 1 percent rise in the energy sector <.miapjen00pus>.

London copper added 0.5 percent to $8,146.50 a tonne after hitting $8,159, its highest since January 11, while U.S. crude oil held steady around $97.56 a barrel after rising over 1 percent on Tuesday on expectations of higher demand. Brent inched up 0.1 percent to $114.45.

Shanghai rebar steel futures climbed more than 1 percent to their highest since May on views demand from top steel consumer China will pick up after a week-long holiday in February.

"Sentiment has changed this year, with signs of stabilization in the euro zone, a U.S. economic recovery and a shift to a new Chinese political regime removing obstacles which had stood in the way of investors taking risks last year," said Xiao Minjie, an independent economist based in Tokyo.

"Domestic demand holds the key this year. Beijing's drive to urbanize inner China will boost infrastructure spending while Southeast Asia will also likely see expansion in domestic demand accelerating," he said.

Commodity-reliant Australian shares <.axjo> inched up 0.2 percent to a fresh 21-month high, with rising copper prices bolstering top miners. It was the 10th straight day of gains, the longest winning run since October 2003.

"The bar is set almost embarrassingly low for the vast majority of key macro indicators for the U.S., and anything mildly positive is serving to feed more buying enthusiasm. The prevailing market psyche is easily pleased," said Tim Waterer, senior trader at CMC Markets.

Hong Kong shares <.hsi> jumped 0.8 percent and Shanghai shares <.ssec> rose 0.3 percent.

Japan's Nikkei stock average <.n225> soared 2.3 percent to a fresh 33-month high, partly due to a weaker yen. <.t/>

FED STATEMENT EYED

The 10-year U.S. Treasury yield rose to as high as a nine-month high of 2.021 percent in Asia on Wednesday.

"A big question is whether the Fed is still cautious on the economy following recent improvements in Europe and U.S. fiscal cliff talks," said Hiroki Shimazu, fixed income analyst at SMBC Nikko Securities, adding that a more optimistic Fed economic assessment could pressure Treasuries.

The Fed ends a two-day policy meeting on Wednesday, and few market watchers expect any near-term shift in its current, very accommodative stance.

But investors will focus on the statement for any clues to the Fed's thinking on if and when it might pull back from its aggressive easing stimulus. The minutes from the December meeting, released earlier this month, hinted at uneasiness within the Fed around its asset-buying program and sparked a sell-off in Treasuries and lifted yields up out of ranges.

Morgan Stanley said in a research note that global stimulus efforts and structural reallocation paved the way for a sustained period of asset-price reflation.

"This has three implications: Reflation would lend support to higher-yielding emerging markets assets, safe-haven assets would continue to weaken, and expectations about emerging markets policy would likely shift," it said.

The yen stayed pressured, with the Bank of Japan set to pursue strong monetary easing as Prime Minister Shinzo Abe's administration pushes for radical reflationary policies to end stubborn deflation.

The dollar rose 0.2 percent to 90.93 yen, near its highest level since June 2010 of 91.32 reached on Monday. The euro gained 0.2 percent to 122.66 yen, not far from 122.91 also touched on Monday, its highest point since April.

The prospect of continued weakness in the yen and rising risk appetite lifted the Australian dollar to four-year highs on the yen and New Zealand dollars hovered near a four-year high against the yen.

Aussie rose as high as 95.34 yen while Kiwi rose as high 76.27 yen, close to 76.37 set Friday, its strongest since 2008.

The euro traded at $1.3496, a tad below Tuesday's 14-month high of $1.3498.

Asian credit markets underperformed the region's equities as the spread on the iTraxx Asia ex-Japan investment-grade index widened by 2 basis points on an increase in new issues and some caution before the Fed's statement.

(Additional reporting by Miranda Maxwell in Melbourne, Gyles Beckford in Wellington and Hideyuki Sano in Tokyo; Editing by Eric Meijer & Kim Coghill)

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