news20091228reut2

[Top News] from [REUTERS]

[Japan]
Kevin Yao
SINGAPORE
Mon Dec 28, 2009 2:40am EST
Asian shares up on econ outlook, dollar hovers
SINGAPORE (Reuters) - Japanese shares hit a four-month high, leading gains in Asian stocks on growing investor optimism about the global economy, while the U.S. dollar held firm against the yen and euro.

Signs of a recovery in the United States also lifted oil prices to a four-week high.

European stock index futures pointed to a higher open, as stocks track gains in Asia and in commodities, with futures for the DJ Euro Stoxx, for Germany's DAX and for France's CAC were up 0.9-1.1 percent.

The MSCI index of Asia Pacific stocks outside Japan rose just over 0.7 percent in thin trade as markets in Australia and New Zealand remained shut for holidays.

The Thomson Reuters index of Asia ex-Japan equities was up 0.6 percent.

The MSCI index has rallied 65 percent this year, driven by waves of foreign capital inflows trying to cash in on Asia's faster-than-expected economic recovery.

By contrast, the Dow Jones industrial average has risen 20 percent while the FTSEurofirst 300 index of leading European shares has gained almost 25 percent.

Chinese stocks led gains, with the Shanghai Composite Index jumping 1.7 percent, lifted by Premier Wen Jiabao's comments on Sunday that Beijing was committed to seeing through its stimulus package to help cement the economic recovery.

The Shanghai index has gained 5 percent after falling to a seven-week low on Tuesday.

"Wen's comments ... gave the market the impression that China's loose money policy will not change at least for the first quarter of next year," said a senior dealer at a big Chinese stockbroker.

"In addition, both the economy and corporate earnings are improving. Investors feel assured of a decent stock market performance at least early next year."

NIKKEI AT FOUR-MONTH HIGH

Japan's Nikkei average rose 1 percent to its highest in four months on data showing factory output rising for the ninth straight month in November and on stable currency moves.

"The industrial output data was stronger than what the market had expected and that's reinforcing the positive sentiment. The stable dollar/yen moves are also making it easier to pick up exporter shares," said Tsuyoshi Segawa, equity strategist at Mizuho Securities.

Japan's industrial output rose a more-than-expected 2.6 percent in November, the strongest gain in six months as rising exports to Asia bode well for a recovering economy.

That followed upbeat U.S. data on Thursday which showed a drop in initial jobless claims and growth in durable goods orders.

Meanwhile, Japanese government bond futures slid, taking in stride the government's announcement late last week that it plans to issue a record 144.3 trillion yen in treasury debt in the next fiscal year.

U.S. and European markets were shut on Friday for Christmas

after closing at their highest in over a year on Thursday.

The dollar hovered near 91.50 yen, little changed from Thursday's close and was below a two-month high of 91.88 yen set last week as investors covered short dollar positions before the year-end.

The euro edged up to $1.4390, off its 3- month low of 1.4216 hit last week.

The euro is down 4 percent against the dollar so far this month and on course for its biggest monthly fall since January, dented by concerns about sovereign ratings after a third ratings agency downgraded Greece's debt.

U.S. crude oil for February delivery gained 0.8 percent to $78.68 a barrel, highest since December 1 supported also by large declines in U.S. crude inventories.

Gold prices gained up 0.9 percent to $1,113.45 in thin trade.

(Additional reporting by Lu Jianxin in SHANGHAI; Editing by Jan Dahinten)


[World]
Adam Entous
WASHINGTON
Mon Dec 28, 2009 1:19am EST
Attempted bombing spotlights al Qaeda growth in Yemen
WASHINGTON (Reuters) - An attempted Christmas Day bombing of a U.S. passenger jet has put a spotlight on the Middle East state of Yemen which American spy agencies see as a rapidly growing hub for al Qaeda.

Civil war and lawlessness have turned the Arab world's poorest state into an attractive alternative base for al Qaeda, which U.S. officials say has been largely pushed out of Afghanistan and is under growing military pressure from the Pakistani army in bordering tribal areas.

Nigerian Umar Farouk Abdulmutallab, 23, is charged with attempting to blow up a Northwest Airlines plane as it approached Detroit on a flight from Amsterdam with almost 300 people on board.

In U.S. questioning, Abdulmutallab claimed that al Qaeda operatives in Yemen supplied him with an explosive device and trained him on how to detonate it, an official said.

Al Qaeda's presence in Yemen has grown over the last year and Washington fears it could become a central base of operations outside Pakistan and Afghanistan, according to U.S. counterterrorism officials and experts.

The United States has quietly been supplying military equipment, intelligence and training to Yemeni forces, who have raided suspected al Qaeda hide-outs this month, they said.

U.S. officials declined to discuss specific assistance. But in September, U.S. President Barack Obama sent a letter to Yemeni President Ali Abdullah Saleh promising to help the government fight against terrorism, according to the Yemeni state news agency Saba.

Senator Joseph Lieberman, chairman of the Homeland Security Committee, said on "Fox News Sunday" that the United States had a "growing presence" in Yemen which included Special Operations, Green Berets and intelligence.

'TOMORROW'S WAR'

Lieberman, who recently visited Sanaa, the capital of Yemen, said a U.S. government official there told him that "Iraq was yesterday's war. Afghanistan is today's war. If we don't act preemptively, Yemen will be tomorrow's war."

In recent congressional testimony, Mike Leiter, director of the National Counter Terrorism Center, called Yemen "a key battleground and potential regional base of operations from which al Qaeda can plan attacks, train recruits, and facilitate the movement of operatives."

"Of particular concern to the FBI are individuals who can travel with fewer restrictions to these areas of extremist activity and then enter the United States under less scrutiny," FBI Director Robert Mueller told lawmakers.

Yemen has been a long-standing base of support for al Qaeda. Militants bombed the Navy warship USS Cole in the Yemeni port of Aden in 2000, killing 17 U.S. sailors, and Yemenis were one of the largest groups to train in al Qaeda's camps in Afghanistan before September 11, 2001 attacks.

Of the 198 prisoners left at the U.S. military prison at Guantanamo Bay, Cuba, which Obama has vowed to close, 91 are from Yemen, and talks over repatriating them have bogged down due to concerns they will join al Qaeda once they return.

Since Saudi and Yemeni militants united earlier this year under the name "Al Qaeda in the Arabian Peninsula" with Yemen as their base, there has been a "steady uptick" in the group's activities, said Christopher Boucek, an expert with the Carnegie Endowment in Washington.

"Yemen has rapidly become a very important secondary front" in al Qaeda's global ambitions, Boucek said, with the "greatest growth potential" because the government has been unable to exert control over its own territory.

Besides combating al Qaeda militants, Yemen is fighting Shi'ite rebels in the north and faces separatist sentiment in the south.

Fearing instability in Yemen could turn into a security threat for the kingdom, Saudi Arabia, the world's biggest oil exporter, began attacking Yemen's Shi'ite Muslim rebels, known as the Houthis, in early November after the rebels staged a cross-border incursion and killed two Saudi border guards.

(Additional reporting by Jeremy Pelofsky; Editing by Alan Elsner)