SINGAPORE, Jan 19 - Asian stocks rose on Monday, led by gains in techs such as Sharp Corp <6753.T> as solid U.S. earnings boosted hopes for strong results in the region, but the outlook for the dollar preoccupied many investors. The dollar was steady against the euro after its biggest one-day rise in five months on Friday on a jump in foreigners' net purchases of U.S. assets in November and as traders turned cautious ahead of the Group of Seven meeting in early February. Spot gold was higher despite the steady dollar, but volumes were expected to be thin due to a holiday in the United States. Japan's Nikkei <.N225> had risen 1.35 percent to 11,003.66 by the midday break as investors snapped up electronics firms after strong gains in their U.S. peers and a healthy outlook. "The market's favourites, among day traders using the Internet in particular, are the same -- digital consumer products makers," said Terushi Hirotama, head of trading at Ichiyoshi Securities. Sharp jumped two percent, while rival Matsushita Electric Industrial Co <6752.T> rose 1.5 percent. An MSCI index of Asia Pacific shares outside Japan <.MSCIAPJ> was flat near four-year highs by 0230 GMT. Shares in South Korea <.KS11> were up 0.9 percent, lifted by technology bellwether Samsung Electronics Co Ltd <005930.KS> which climbed 2.77 percent to a record high before easing slightly. Shares in Australia <.AXJO> rose 0.6 percent, while Singapore <.STI> and Hong Kong <.HSI> were flat. Trade across Asia was thin ahead of the Lunar New Year holiday this week.
FOCUS ON G7
The dollar was fetching around 106.60 yen , little changed from late New York levels on Friday and off a three-year low around 105.70 yen hit last week. The euro stood at $1.2382 compared with $1.2389 in late U.S. trade and after falling to a one-month low of $1.2350 on Friday. "After such a big adjustment, I think it (dollar) will stay range-bound for the time being. Also with the G7 ahead, players will want to wait and see," said Toshihiro Azuma, forex sales manager at Sumitomo Trust and Banking. The key focus of the market is on how policy makers from the G7 countries will react to the dollar's weakness at their meeting in Florida on February 6 and 7. Japan's top financial diplomat, Zembei Mizoguchi, reiterated on Monday that foreign exchange markets should be stable, adding that the Group of Seven industrialised nations shared that view. The dollar rose on Friday after U.S. Treasury data showed foreigners invested $87.6 billion in U.S. assets in November, sharply higher than a revised $27.8 bilion in October. With the U.S. trade deficit running at about five percent of gross domestic product, the United States needs about $40 billion a month of capital inflows to fund its current account deficit.
SPOTLIGHT ON EARNINGS
Asian stocks were driven higher after solid earnings from U.S. companies such as network gear maker Juniper Networks Inc and conglomerate General Electric Co . The results pushed the tech-heavy Nasdaq Composite Index <.IXIC> to a fresh 2-1/2-year high on Friday, while the Dow Jones Industrial Average <.DJI> reached peaks unseen in just under two years. The U.S. stock market is closed on Monday in observance of the late civil rights leader Martin Luther King Jr.'s birthday. The shape of the market will come into focus quickly on Tuesday with an avalanche of earnings from companies such as Citigroup and United Technologies . Japanese government bond prices dipped as stocks rose, tracking a decline in U.S. Treasuries on the back of upbeat consumer sentiment data. The benchmark 10-year JGBs <0#JPTSY=JBTC> rose 1.5 basis points to yield 1.290 percent. The NYMEX market is closed for the U.S. holiday. On Friday, oil prices jumped five percent, closing above $35, as sub zero temperatures in the U.S. Northeast threatened to strain already low U.S. fuel stocks. Spot gold was at $407.17 an ounce against New York's last quoted level of $406.20.//www.reuters.com