Published: 06 Jan 2010 02:45:31 PST
* Euro slides as ECB official says EU won't save Greece
* Dollar makes further gains against yen after finmin quits
* Asian stocks creep up, investors wary ahead of U.S. jobs
HONG KONG, Jan 6 - The euro took a brief battering on Wednesday on worries the European Union would not rescue fiscally struggling Greece, while concern about a big drop in U.S. home sales limited gains in Asian stocks.
The dollar extended gains against the yen to hit a session high after Japanese Prime Minister Yukio Hatoyama accepted Finance Minister Hirohisa Fujii's resignation, a widely expected move.
National Strategy Minister Naoto Kan, a heavyweight in the current administration, has accepted the finance minister's post, the prime minister said.
The dollar, which had been steadily rising against the yen through the day, rose to 92.47 yen before steadying, according to Reuters data.
The euro fell to $1.4285 after European Central Bank Executive board member Juergen Stark was quoted in a media report as saying the European Union would not bail out Greece, which is heading towards becoming the eurozone's most indebted economy. Stark's reported comments flew in the face of what EU leaders have suggested, however, and the currency recovered most of its poise.
The dollar, which has been weakening in the few days of trading so far this year, was up slightly against a basket of currencies.
The benchmark Nikkei share index edged up 0.5 percent to a fresh 15-month closing high with resource-related shares continuing to rise on the back of a surge in commodity and oil prices since the start of the year.
Shares of Japan Airlines, however, tumbled 6.7 percent on a report a government-backed turnaround fund is seeking bankruptcy proceedings for the struggling carrier.
The MSCI index of Asia Pacific stocks traded outside Japan, which has been trading at 17-month highs this week, rose about half a percent.
Investors were cautious after data on Tuesday showed an unexpected drop in pending U.S. homes sales in November, but other data pointed to upbeat factory orders.
"The U.S. indicators are showing a lot of recovery, but the non-farm payrolls on Friday are likely to be a real test of how genuine this is," said Noritsugu Hirakawa, a strategist at Okasan Securities.
"Hopes for the numbers could send the dollar higher this week on hopes of a U.S. rate hike sooner, which will boost exporters, but the Nikkei's recent rises have raised concerns about overheating and that could limit gains."
Markets were awaiting the December ADP employment data and the minutes from last month's Federal Reserve meeting, due later on Wednesday, for any clues about the health of the U.S. economy and when the Federal Reserve might start to raise interest rates. Investors are also awaiting key U.S. non-farm payroll data on Friday. If the economy actually added jobs, as a minority of economists predict, it would provide a powerful jolt to what has been a sluggish recovery.
Taiwan stocks outperformed the region with a 1.4 percent rise to a 19-month closing high, led by LCD maker AU Optronics and other DRAM issues, as investors bought into the companies' brighter earnings outlook this year.
Hong Kong stocks rose 0.6 percent to their highest level in more than a month, with exporters gaining on optimism about a global economic recovery.
Shares in Shanghai slipped just under a percent, with the bank sector soft amid worries of fundraising within the banking industry, while the outlook for increased new share supply weighed on sentiment.
Shares in Korea, Singapore and India rose less than a percent, while Australia edged lower on profit taking after recent gains.
OIL BELOW $82
Oil snapped a nine-day winning streak, staying under $82 a barrel after industry data showed a surprise rise in U.S. distillate inventories last week even though heating oil supplies fell.
Copper futures rose in Shanghai to 61,600 yuan ($9,019) a tonne, their highest level since July 2008, buoyed by recent positive economic data from the United States and China and aided by concerns over harsh weather in China that could disrupt the supply of base metals.
"Some investors who closed their positions before the New Year's Day holiday are now back buying again," said Wang Zhouyi, an analyst at Shanghai CIFCO Futures in Shanghai.
Gold which has see-sawed this week in inverse relation to the dollar, rose to above $1,126 an ounce from $1,118.10 at the New York close.
The precious metal rallied 25 percent last year as investors bought it as a haven and as a hedge against a declining dollar and inflation risk. But it is now some hundred dollars off a record high of $1,226.10 on Dec. 3 amid uncertainty about the dollar's direction and on signs the global economy is improving.
Asian currencies continue to benefit from rising risk appetite and South Korean authorities were spotted intervening for a second day to rein in the surging won which hit a 15-month high on expectations interest rates may soon rise.
Japanese government bonds edged lower, with the 10-year yield hitting a seven-week high at one point before dipping after the sale of 10-year debt. Prices at the auction, the first supply hurdle for the market this year, were in line with expectations. (Additional reporting by Elaine Lies in TOKYO and Rujun Shen in SHANGHAI; Editing by Kim Coghill)
