* Dollar climbs after Yellen's upbeat U.S. labor market
* European shares steady after attacks in Germany, Turkey
* Yen slides as BOJ says to maintain loose policy
* Dow, Nasdaq hit record highs
(Updates to U.S. market open, changes dateline, previous
By Dion Rabouin
NEW YORK, Dec 20 The dollar hit a 14-year high
on Tuesday as the yen slid after the Bank of Japan stuck to its
ultra-loose monetary policy, while U.S. stock indexes touched
record highs as the rally in riskier assets since the U.S.
election looked set to continue.
On Wall Street, the Dow neared the 20,000 level as
reassurance over Italy's plan to spend up to 20 billion euros
($21 billion) to rescue its troubled banks offset risk aversion
following attacks in Turkey and Germany a day earlier.
"Investors have become so fast in digesting bad news, and
this explains the resilience in financial markets," said Hussein
Sayed, chief market strategist at FXTM.
U.S. stocks have rallied since the Nov. 8 election, with the
S&P 500 rising nearly 6 percent on bets that President-elect
Donald Trump's plans for deregulation and infrastructure
spending will give a boost to business.
The Dow Jones industrial average rose 85.04 points,
or 0.43 percent, to 19,968.1, the S&P 500 gained 6.81
points, or 0.30 percent, to 2,269.34 and the Nasdaq Composite
added 19.93 points, or 0.37 percent, to 5,477.38.
Both the Dow and Nasdaq hit all-time intraday highs.
European shares steadied, with the pan-European
FTSE Euro 300 adding 0.3 percent. Emerging market shares were
flat while MSCI's broadest index of Asia-Pacific
shares outside Japan ended down 0.3 percent.
China's CSI 300 index slid 0.6 percent on
Beijing's move to tighten supervision of shadow banking
activities and on liquidity concerns, while Japan's Nikkei
closed up 0.5 percent after a late BOJ-linked rally.
The dollar rose, tracking U.S. bond yields higher
, as the strong appetite for risk assets pushed
traders out of bonds and into stocks. Positive comments on
Monday from Federal Reserve Chair Janet Yellen on the state of
the U.S. labor market also boosted the greenback.
"She didn't use the opportunity to take the market back from
being overly hawkish," said UBS currency strategist Constantin
Bolz, in Zurich. "Maybe there were some people who ... thought
they would hold off from further dollar longs until she spoke,
in case she were to row back."
The dollar rose almost half a percent against a basket of
major currencies to 103.65, the highest level since
Its gains were strongest against the yen, which slid around
1 percent after the Bank of Japan, shrugging off the yen's
recent slump, said it would keep monetary policy loose.
Benchmark 10-year U.S government bond yields, which set the
bar for global borrowing costs, rose to just above 2.58 percent.
The dollar rally and bond market selloff since the Nov. 8
U.S. election have been stoked by bets Trump's administration
would enact looser fiscal policy, which would spur higher U.S.
growth and inflation.
"The dollar and bonds have been trading in lockstep," said
Ellis Phifer, senior market strategist at Raymond James in
Memphis, Tennessee. "There are still concerns spending will
increase and more debt supply will be on its way."
The greenback has risen 12 percent versus the yen since
Trump's surprise victory. The win was made official on Monday
after Trump surpassed the required 270 Electoral College votes.
Oil prices hit one-week highs on anticipation of a decline
in U.S. crude stocks. Brent crude gained around 1.5
percent to $55.72 a barrel while WTI added 0.63 percent
to $52.45 a barrel.
(Reporting by Dion Rabouin; Additional reporting by Richard
Leong in New York, Nichola Saminather in Singapore, Tanya
Agrawal in Bangalore, Marc Jones in London; Editing by Meredith