Asian stocks rose on Tuesday, led by a rebound in Japanese shares as investors hunted for bargains, and commodities like crude oil strengthened as the weaker U.S. dollar made them cheaper for buyers using currencies other than the greenback. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent. Japan's Nikkei .N225, which fell to two-month lows on Friday, pared earlier losses and gained more than 1 percent on bargain hunting in beaten-down shares such as banking stocks. Still, the bullish yen remained a concern for Japanese equities. "Investors are frustrated about the lack of effective measures against the strong yen," said Hikaru Sato, senior technical analyst at Daiwa Securities in Tokyo. "Confidence in Japanese stocks has waned since the end of last year and it still hasn't recovered." European stocks were seen opening slightly lower, with weak-looking results from Alcoa (AA.N) potentially weighing on mining stocks. Australian shares climbed 0.9 percent, supported by firm commodities. South Korea's Kospi .KS11 added 0.5 percent. Volatile Shanghai stocks .SSEC bucked the trend and lost 0.5 percent. Despite the gains made on Tuesday, wariness over the U.S. earnings season was expected to cap risk assets this week. Metals company Alcoa (AA.N) on Monday reported a lower quarterly profit, with results hurt by factors like low commodity prices. "Alcoa kicked off the earnings season in weak fashion and the U.S. banks are reporting over the next few days, which markets typically take as a bellwether of the rest of the season," wrote Sam Tuck, senior FX strategist at ANZ. "Markets are expecting a tough reporting season, which will ensure they remain sceptical on the improvements in the global backdrop." U.S. crude oil fetched $40.17 a barrel after rising to a three-week high of $40.75 on Monday. Brent crude LCoc1, which popped above $43 a barrel to a four-month peak overnight, traded at $42.62. The dollar's recent depreciation has boosted commodity prices and crude was lifted by hopes that oil producers would agree at a meeting in Doha next Sunday to curb output. A weaker greenback favours non-U.S. buyers by reducing the effective cost of commodities priced in dollars. Spot gold XAU= touched a three-week high of $1,259.66 an ounce. Spot silver XAG= was down 0.4 percent after surging 3.9 percent overnight and platinum XPT= edged back 0.2 percent following Monday's 2 percent rise. Iron ore .IO62-CNI=SI rose nearly five percent overnight to $55.90 a tonne, its highest in three weeks. The dollar was up 0.4 percent at 108.34 yen JPY=, but still in reach of a 17-month low of 107.63 struck on Monday. The dollar index .DXY stood at 94.009, hovering near an 8-month trough of 93.748 plumbed overnight. The euro was flat at $1.1411 EUR=. The U.S. currency has been on the back foot since Federal Reserve Chair Janet Yellen last month doused expectations for hikes in U.S. interest rates anytime soon. Commodity-linked currencies stood firm as commodity prices rose. The Australian dollar added 0.4 percent to $0.7629 AUD=D4, on track for its third straight day of gains. The Canadian dollar was steady at C$1.2903 CAD=D4 per dollar following a rise of 0.7 percent on Monday. Risk assets made modest gains in the region as safe-haven government bonds, supported by very loose monetary policies, continued to attract demand. The 30-year Japanese government bond (JGB) yield slipped to a new record low of 0.390 percent as investors continued to move down the yield curve for better returns. Source: Reuters
