* Asia stocks ex-Japan set for best week since July
* Nikkei closes down, logs loss for the week
* European stocks expected to open flat to slightly lower
* Dollar sluggish on Fed's slower-than-expected rate rise
* Euro touches 5-1/2-week high on Dutch election result
By Nichola Saminather
SINGAPORE, March 17 Asian stocks advanced on
Friday and looked set for their best week since July, while the
dollar extended a slide that began after the Federal Reserve
indicated it was unlikely to speed up monetary tightening.
Financial spreadbetters predicted a muted start to European
stocks after Thursday's strong gains, with Britain's FTSE
and Germany's DAX expected to open 0.1 percent
lower and France's CAC 40 seen starting the day flat.
The dollar index, which tracks the greenback against
a basket of six trade-weighted peers, retreated 0.2 percent to
100.18. It hit a five-week low on Thursday, and is down 1
percent for the week.
The dollar was steady at 113.32 yen but is on track
to post a 1.2 percent loss for the week.
While the Fed raised interest rates by 25 basis points on
Wednesday as widely expected, it kept its original forecast of
three rate hikes this year, disappointing investors who were
expecting a bump up to four after a string of upbeat U.S.
U.S. Treasury yields, which slid after the decision, staged
a recovery on Thursday and continued to rise on Friday.
The 10-year yield was at 2.5313 percent, from its last close
"The story in global markets over the past 24 hours has
centred on a broad-based tightening of monetary policy
conditions (and the perception of future tightening)," Chris
Weston, chief market strategist at IG in Melbourne, wrote in a
Markets are also keeping an eye on the Group of 20 finance
leaders' meeting in Germany this weekend, where topics including
protectionism, exchange rates and reforms to boost economic
growth are expected to be on the agenda.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 0.3 percent and were on track to end the
week with a 3.5 percent gain, its biggest increase since the
week ended July 15.
Japan's Nikkei closed down 0.45 percent, ending the
week with a 0.4 percent loss.
Chinese stocks slipped 0.6 percent as investors
sought more evidence of a sustainable economic recovery, but
indexes were set for a 1 percent increase for the week.
Hong Kong's Hang Seng index touched its highest level
since August 2015 on Friday. While up only marginally on the
day, it was on track for a 3.2 percent gain for the week, its
biggest since September.
MSCI's all-country world stock index held
near Thursday's all-time high on Friday, on track to end the
week 1 percent higher.
Overnight, Wall Street was subdued following strong gains
after the Fed's rate decision. The Nasdaq was flat,
while the Dow and the S&P 500 posted losses.
But European shares were upbeat following the election
victory of Dutch Prime Minister Mark Rutte, who defeated
anti-immigration, anti-European Union rival Geert Wilders.
"Shares remain vulnerable to a short-term pull-back as
investor sentiment towards them is very bullish and a lot of
good news has been factored in – but there is a risk that any
pullback may not come until seasonal weakness kicks in around
May," Shane Oliver, head of investment strategy at AMP Capital,
wrote in a note.
The euro, which touched its highest level in
5-1/2-weeks early on Friday, hovered near that level at $1.0773,
after two days of strong gains. It is set to end the week up 0.9
Sterling was steady at $1.2358. On Thursday, it
jumped to a two-week high after a decision by the Bank of
England to hold interest rates steady, while hinting it might
raise them soon.
In commodities, oil prices rose slightly, supported by a
U.S. crude climbed almost 0.2 percent to $48.84 a
barrel, and looked set to end the week 0.7 percent higher.
It touched its lowest level in 3-1/2 months early this week
on concerns about a supply glut in the United States, but data
on Wednesday showing a small decline in stockpiles there helped
Global benchmark Brent added almost 0.1 percent to
$51.77 a barrel, and was headed for a 0.8 percent weekly gain.
Gold edged up 0.1 percent to $1,227.8101 an ounce. It
was poised to gain 1.9 percent for the week, its first in three,
driven by the Fed's more moderate monetary policy stance.
(Editing by Simon Cameron-Moore and Kim Coghill)