European Shares Gain as Yen Falters

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Published April 22, 2013

| Reuters

LONDON, April 22 (Reuters) - European shares rose and German bond futures dipped on Monday as the re-election of Italy's president eased a two-month old political crisis, while the yen fell after the G20 accepted Japan's bold stimulus policy.

A lack of criticism of Japan's reflationary polices at the weekend from the G20 club of advanced and emerging economies allowed the yen to weaken further, setting up a test of the symbolic 100 yen to the dollar level.

"I think we're going to get there (100 yen) very soon indeed, because there is nothing supporting the yen," said James Bevan, chief investment Officer at CCLA Investment Management.

The dollar was at 99.80 yen, off an intraday high of 99.89 and just below a four-year peak of 99.95 hit on April 11.

The euro also rose against the yen, reaching 130.70 from around 129.98 late on Friday. It was nearing a three-year peak of 131.10 set earlier in the month.

Against the dollar, the euro eased slightly to $1.3060 after touching a session high of $1.3130 on Friday.

The euro, which failed to break above $1.3200 recently, has been stuck in a $1.3000/3200 range in the past week or so.

European stock markets rose for a second straight session, led higher by the Italian blue-chip index, the FTSE MIB index , which rose 1.8 percent, after the re-election of Italy's 87-year old president Giorgio Napolitano.

The move has raised the prospect of an end to the two months of political stalemate that followed a general election, with a new government expected to be formed within days.

The broad FTSEurofirst 300 index was up 0.4 percent at 1,158 points, while Paris's CAC-40 and Frankfurt's DAX were around 0.4 percent higher.

Italian 10-year bond futures were 0.7 percent higher at 113.75 in early trading on the political resolution, while safe haven German Bund futures eased 0.1 percent to 145.86.

Traders expect losses in German bonds to be limited before key surveys on purchasing managers' activity this week that are forecast to show euro zone growth still anaemic.

Meanwhile, gold prices were rebounding after a sharp sell-off last week, though all commodity markets remained wary of the global growth outlook ahead of the euro zone data and similar survey due from China.

Gold rose more than 1 percent, pushing cash bullion up as high as $1,423.81 an ounce, well above the two-year low of $1,321.35 touched last week.

European shares rose and German bond futures dipped on Monday as the re-election of Italy's president eased a two-month old political crisis, while the yen fell after the G20 accepted Japan's bold stimulus policy.

A lack of criticism of Japan's reflationary polices at the weekend from the G20 club of advanced and emerging economies allowed the yen to weaken further, setting up a test of the symbolic 100 yen to the dollar level.

"I think we're going to get there (100 yen) very soon indeed, because there is nothing supporting the yen," said James Bevan, chief investment Officer at CCLA Investment Management.

The dollar was at 99.80 yen, off an intraday high of 99.89 and just below a four-year peak of 99.95 hit on April 11.

The euro also rose against the yen, reaching 130.70 from around 129.98 late on Friday. It was nearing a three-year peak of 131.10 set earlier in the month.

Against the dollar, the euro eased slightly to $1.3060 after touching a session high of $1.3130 on Friday.

The euro, which failed to break above $1.3200 recently, has been stuck in a $1.3000/3200 range in the past week or so.

European stock markets rose for a second straight session, led higher by the Italian blue-chip index, the FTSE MIB index , which rose 1.8 percent, after the re-election of Italy's 87-year old president Giorgio Napolitano.

The move has raised the prospect of an end to the two months of political stalemate that followed a general election, with a new government expected to be formed within days.

The broad FTSEurofirst 300 index was up 0.4 percent at 1,158 points, while Paris's CAC-40 and Frankfurt's DAX were around 0.4 percent higher.

Italian 10-year bond futures were 0.7 percent higher at 113.75 in early trading on the political resolution, while safe haven German Bund futures eased 0.1 percent to 145.86.

Traders expect losses in German bonds to be limited before key surveys on purchasing managers' activity this week that are forecast to show euro zone growth still anaemic.

Meanwhile, gold prices were rebounding after a sharp sell-off last week, though all commodity markets remained wary of the global growth outlook ahead of the euro zone data and similar survey due from China.

Gold rose more than 1 percent, pushing cash bullion up as high as $1,423.81 an ounce, well above the two-year low of $1,321.35 touched last week.

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