* Nikkei bucks trend, rises to highest in a year
* Euro inches down as investors digest ECB move
* ECB trims volume of asset buying, extends period
* Crude oil prices extend gains on optimism for output cuts
By Lisa Twaronite and Wayne Cole
TOKYO/SYDNEY, Dec 9 Asian shares edged down on
Friday but were on track for weekly gains, while the euro became
more settled after the volatility seen in the wake of the
European Central Bank's decision to trim the size of its asset
purchase program while also extending it for longer than many
analysts had expected.
MSCI's broadest index of Asia-Pacific shares outside Japan
dipped 0.3 percent, and was poised for a weekly
gain of 1.9 percent.
Financial spreadbetter IG CMC markets expect Britain's FTSE
to start the day unchanged, and Germany's DAX
and France's CAC 40 to open modestly higher.
Japan's Nikkei stock index ended 1.2 percent up at
its highest closing level since December 2015, 3.1 percent ahead
for the week in which the dollar has so far gained 0.8 percent
against the yen.
The Nikkei earlier topped the 19,000-level for the first
time in a year, as investors saw both the weak yen and prospects
of U.S. President-elect Donald Trump adopting reflationary
policies benefiting Japan's major exporters.
"The U.S. market's strength is giving a boost to Japanese
shares," said Eiji Kinouchi, chief technical analyst at Daiwa
Major U.S. stock indexes climbed again on Thursday and set
fresh record highs as Wall Street continued its month-long rally
following Trump's election.
The dollar was up 0.4 percent at 114.44 yen, moving
back toward last week's 10-month high of 114.83 yen.
The euro inched down slightly to $1.0615. It spiked
as high $1.0875 before tumbling when markets realised the ECB's
actions were actually very dovish.
The ECB said it would reduce its monthly asset buys to 60
billion euros ($63.68 billion) as of April, from the current 80
billion euros, and extend purchases to December from March -
three months longer than what some analysts had forecast.
That dragged down two-year yields across Europe and sharply
steepened the yield curve, a gift for banks that typically
borrow short maturities and lend long.
The promise of lower rates for longer was taken as a green
light for carry trades, where investors borrow euros at cheap
rates to invest in higher yielding currencies.
ECB President Mario Draghi said the unexpected move was not
an outright winding-down of the central bank's quantitative
easing (QE) program, and the central bank reserved the right to
increase the size of purchases again if the eurozone economy
The ECB's bond purchase changes came less than a week before
the Federal Reserve's policy meeting next Tuesday and Wednesday.
Interest rate futures, implied traders saw a
98 percent chance the U.S. central bank would raise interest
rates by a quarter point next week, and about a 50 percent
chance it would raise rates by at least another quarter point by
June 2017, according to CME Group's FedWatch program.
"We're at a point in time between big announcements from a
couple of the big central banks after the ECB, and looking
forward to Fed next week, so the current momentum underway seems
to be the path of least resistance at this point in time," said
Bill Northey, chief investment officer of the private client
group at U.S. Bank in Helena, Montana.
"We've come a long way, and I wouldn't expect us to keep the
same pace, but the trajectory might be correct" for dollar
strength, he said.
The dollar index, which tracks the greenback against a
basket of six major rival currencies, was steady on the day at
101.13, up 0.4 percent for the week.
Oil built on its gains after rebounding overnight on
growing optimism that non-OPEC producers might follow the
cartel's lead by agreeing to cut output.
U.S. crude added 0.7 percent to $51.18 a barrel.
Brent crude rose 0.3 percent to $54.06.
Spot gold was down slightly at $1,170.03 an ounce and
was set for a weekly decline of about 0.6 percent, pressured by
the stronger U.S. dollar and expectations that the Fed will
raise interest rates next week.
($1 = 0.9422 euros)
(Additional reporting by Ayai Tomisawa in Tokyo; Editing by
Simon Cameron-Moore & Shri Navaratnam)