| GEO Business | Asia stocks rise, yen steady but outlook unclear | Updated at: 1302 PST, Thursday, September 09, 2010
 HONG KONG: Asian stocks edged up and the yen held below a 15-year high on Thursday, after a small rally on Wall Street driven by successful European bond auctions gave investors an excuse to lighten up on their bets.
European shares eased, with the FTSEurofirst 300 .FTEU3 opening down 0.2 percent, while Britain's FTSE 100 .FTSE also fell 0.2 percent and France's CAC 40 .FCHI and Germany's DAX .GDAXI both fell 0.4 percent.
The two biggest issues on investors' minds -- European financial stability and the slowing U.S. recovery -- held bargain hunting in check and risk taking to a minimum.
Australia was the exception, where rising equities led Asia on a solid labour market report, which also drove the Australian dollar to a four-month high.
With few major economic reports due, traders will probably focus on significant chart indicators for the rest of the day.
Meanwhile, the yen's 11 percent rise this year has depressed Japanese equity valuations, with stocks trading at the cheapest relative to expected earnings since December 2008.
With uncertainty rife about how much longer the yen's climb has to run, investors were cautious about rebuilding their Japanese stock portfolios just yet.
"Worries about Europe were soothed somewhat following a bond auction in Portugal, and that prompted short-covering in the market, which was hit hard by the advance in the yen versus the dollar and the euro yesterday," said Tsuyoshi Segawa, an equity strategist at Mizuho Securities.
"But market players were reminded that Europe's sovereign concerns are continuing and that's not something that will improve right away," Segawa said.
The Nikkei share average .N225 closed 0.8 percent higher but was still down 3 percent for the quarter and is the third-worst performing Asian stock market this year.
Japanese stocks were trading at 12.9 times expected earnings one year hence, the lowest since December 2008, when markets were in the midst of the financial crisis.
"Relatively low prices may trigger occasional bottom fishing, but we do not see the market emerging from its downward spiral until momentum indicators stop deteriorating," TrimTabs Investment Research said in a report. |  | | | |
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