GLOBAL MARKETS-Bank of Japan easing helps shares but euro worries return

* BOJ expands asset buying
* Yen slips broadly, global shares rise
* Oil prices, euro slip

By Marc Jones
LONDON, Sept 19 (Reuters) - Global shares rose and the yen
fell to a one-month low on Wednesday after the Bank of Japan
became the latest leading central bank to offer aggressive new
measures to stimulate economic activity.
Nagging concerns about debt-strained euro zone members
Greece and Spain limited the gains, however, pushing the euro
back towards the $1.30 mark against a mildly stronger dollar and
dragging back oil prices.
"The feel-good factor from the Bank of Japan's move has worn
off quickly and it's back to European matters," said Investec
strategist Phillip Shaw.
"The questions are over the Spanish bailout and whether
Spain will receive support from the ECB. There is also some
focus on Greece and whether it will get some more time for its
spending cuts."
Japanese stocks rallied to four-month high after the BOJ
said it would increase its asset buying and loan programme,
currently its main monetary easing tool, by 10 trillion yen
($127 billion) to 80 trillion.
Its announcement followed a decision by the Federal Reserve
to pump $40 billion a month into the U.S. economy until the jobs
market improved and new plans from the European Central Bank to
fight the region's debt crisis.
But the positive mood was waning by midday in Europe. The
MSCI index of global stocks and top European
shares clung to minor gains of between 0.05 and 0.3
percent as euro zone worries sent German, French and Spanish
markets into negative territory before rebounding.
With key housing market data expected to confirm a recent
uptick in the sector Wall Street was expected to open higher
after dipping on Tuesday.
Many big stock markets have risen 15-20 percent since June
on expectations of central bank measures, all of which have
either been met or exceeded over the last two weeks.
Analysts are now questioning whether the rises can be
sustained with economic fundamentals still decidedly weak.
"What we have seen over the last two weeks has been positive
for stock markets because there is enormous liquidity, and due
to low interest rates there is a lack of alternative investment
opportunities," said ING analyst Carsten Brzeski.
"If the central banks continue to ease policy then it will
of course be positive for markets but there is not that much
more room to ease. In the next one to two months the only
additional easing I could see is another rate cut by the ECB."

EURO JITTERS
The Bank of Japan action helped to offset concerns about
tensions between Japan and China over a disputed group of
islands in the East China Sea.
The yen fell to a one-month low of 79.23 to the dollar
while euro zone jitters pushed the euro down 0.1 percent to
$1.3032, a full cent below a four-month high set on Monday.
Bond markets were mixed. With riskier assets looking more
appealing due to the central bank stimulus, yields fell slightly
on Italian and Spanish bonds.
But the ongoing euro zone worries saw the strongest demand
since January at a German two-year debt auction. Bund futures
were last 30 ticks higher on the day at 139.76, moving
further from the 5-1/2 month low of 138.41 hit on Monday.

Oil prices were also impacted, giving up earlier
gains to sink to a six-week low of $111.23 a barrel. They remain
more than 25 percent higher than three months ago, however.
Gold, which has a twin appeal as a safe-haven asset
and inflation hedge, shrugged off the concerns to sit at a 6-1/2
month high of $1,772.49 an ounce.
China's economy remains a major worry for global markets.
The government said on Wednesday the export outlook was grim and
demand may be weaker in the next few months than it has been so
far this year.
"With the European Central Bank, the U.S Federal Reserve and
now the Bank of Japan - the world's major central banks - moving
to ease, there will now be expectations for the PBOC (People's
Bank of China) to follow suit," said Jackson Wong, Tanrich
Securities' vice-president for equity sales.
Minutes from the Bank of England's latest meeting showed
policymakers were unanimous in keeping interest rates and their
asset purchases unchanged, but a number indicated the economy
may need additional support in the coming months.