TOKYO Japanese shares powered to nearly 5-year highs and determined sellers just failed to breach the symbolic 100 yen/dollar level on Monday, even though the Bank of Japan's bold reflationary plans were endorsed by the Group of 20 gatherings in Washington.
While oil and gold rebounded after last week's a sharp sell-off, investors remained wary of volatility due to uncertain global growth prospects, hitting industrial metals such as copper.
European stock markets were seen recovering, with financial spreadbetters predicting London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX would open between 0.4 to 0.8 percent higher.
U.S. stock futures were up 0.5 percent to suggest a firm Wall Street open.
In a communique after a two-day meeting on Friday, the G20 simply said it would be "mindful" of possible side-effects from extended periods of monetary stimulus, without singling out Japan as some had feared.
Japan's central bank governor and finance minister reiterated on Monday that the G20 countries accepted that Japan's monetary easing is not aimed at weakening the yen.
"Following the G20, players feel comfortable selling the yen further, and it is just a matter of timing when the symbolic 100 yen level is hit," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
The dollar was at 99.71 yen, off an intraday high of 99.89, just below a four-year peak of 99.95 hit on April 11. If heavy option barriers lined up around 100 yen to the dollar were to be broken, it could trigger stop-loss buying and lift the dollar up to the next target, a 2009 high of 101.45, he said.
With the euro zone economy looking fragile, the U.S. dollar looked set to strengthen relative to other major currencies. How far that would go depended on U.S. economic data rather than factors from Japan, Saito added.
Japan's Nikkei stock average surged as much as 2.2 percent to nearly five-year highs, cheering the G20 outcome as a clear trend for the yen to weaken -- improving prospects for Japanese corporate earnings.
The rest of Asia fared far less well, with the MSCI's broadest index of Asia-Pacific shares outside Japan inching up 0.2 percent, wary of this week's data from China and the United States.
Australian shares rose 0.5 percent while South Korean shares advanced 0.7 percent.
"Investors are heading into this week cautiously, as the market lacks a clear direction for the moment," said Biyi Cheng, head of dealing Asia Pacific at City Index in Sydney.
FISCAL STRAINS HURT GROWTH
Finance leaders of the G20 advanced and emerging economies also edged away from a long-running drive toward official austerity in rich nations, rejecting the idea of setting hard targets for reducing national debt, revealing their worries over a sluggish global recovery.
That concern was highlighted on Saturday when the International Monetary Fund's steering committee said at the end of its spring meetings that monetary policy alone was not enough to restore confidence. It urged countries to take extra measures to reinvigorate growth and create jobs.
Commodities recovered some ground after last week's sharp sell-offs, but markets may remain vulnerable ahead of China's HSBC flash manufacturing PMI for April due on Tuesday.
"We have our doubts whether this rebound can continue much further in the absence of good economic data. In this context, US economic numbers including Q1 GDP data will be watched very closely this week," Credit Suisse said in a research note.
U.S. crude rose 0.6 percent to $88.51 a barrel and Brent crude rose 0.3 percent to recover $99.96.
London copper fell 0.9 percent to $6,924 a tonne.
Gold rose more than 1 percent, pushing cash bullion up as high as $1,423.81 an ounce, well two-year low of $1,321.35 touched last week.
U.S. gold futures rose as high as $1,423.80, but sentiment remains shaky after steady outflows from exchange-traded funds trimmed holdings to their lowest in three years.
The euro inched down 0.1 percent to $1.3066, under pressure a batch of euro zone economic reports due this week, including consumer confidence later on Monday and the purchasing managers' index on Tuesday.
Italy's re-election of a president on Saturday has raised the prospect of an end to the two months of political stalemate that followed a general election, helping to give some support to the euro.
(Additional reporting by Maggie Lu Yueyang in Sydney and Melanie Burton in Singapore; Editing by Eric Meijer)