* Global markets continue adjusting to prospect of higher US
* Spreadbetters see European shares opening slightly higher
* Dollar index hovers near 14-year peak, USD eyes parity
* MSCI Asia-Pacific index up a fraction, Nikkei hits 1-year
* Oil up, Kuwait may implement bigger-than-expected output
* Bullish dollar, higher yields pressure precious metals
By Shinichi Saoshiro
TOKYO, Dec 16 The dollar stood near a 14-year
peak, bond yields were highly elevated and Asian stocks
struggled for traction on Friday as global markets continued
adjusting to the idea of higher U.S. interest rates.
Ahead of European trading, spreadbetters forecast a slightly
higher open for Britain's FTSE, Germany's DAX
and France's CAC, with a weaker euro and pound seen
supporting European stocks.
In a move that reverberated across the financial markets,
the Fed on Wednesday raised rates for the first time in a year
and projected three more increases in 2017, up from the two
projected in September.
The dollar index against other major currencies last stood
at 103.10 after storming to 103.56 overnight, its highest
since December 2002.
The euro nudged up 0.2 percent to $1.0435 after
hitting $1.0366 overnight, its lowest since January 2003. The
dollar was little changed at 118.145 yen after surging to
a 10-month high of 118.660 the previous day.
The prospect of the Fed tightening monetary policy next year
faster than earlier expected drove the benchmark U.S. Treasury
10-year yield to highs unseen in two years.
Tracking the rise in the U.S. 10-year yield, Japan's 10-year
bond yield brushed an 11-month peak of 0.10 percent
. That gain is expected to test the Bank of
Japan's resolve to keep the yield around zero percent.
Asian stocks were tepid, reflecting the differing fortunes
for developed and emerging market economies faced with higher
U.S. interest rates.
"Emerging market countries have been hit the hardest by
capital leaving in search of higher yields and return along with
the growing cost of paying back dollar denominated debt," wrote
Kathy Lien, managing director of FX strategy at BK Asset
MSCI's broadest index of Asia-Pacific shares outside Japan
was a shade lower after falling 1.8 percent on
Shanghai was flat after losing 0.7 percent the
previous day, while Malaysian and Indonesian shares
weakened slightly. South Korea's Kospi added 0.2
Japan's Nikkei climbed 0.7 percent, reaching a
one-year high on a weaker yen and gains on Wall Street
overnight. U.S. shares rose on Thursday, brushing off the
initial shock of a more hawkish Fed, led by banks seen as
beneficiaries of higher rates.
European stocks also gained on higher bank stocks,
adding 1 percent on Thursday.
Emerging market currencies, hit after November's U.S.
election win by Donald Trump raised the spectre of higher U.S.
rates, suffered a fresh blow from the Fed's latest move.
China on Friday set the yuan's midpoint at its
weakest since 2008. Brazil's real fell as much as 2
percent overnight while the Indonesian rupiah and South
Korean won saw their worst losses since Trump's win.
However, the Mexican peso strengthened after the
country's central bank on Thursday countered the Fed's
tightening with an aggressive rate hike.
In commodities, precious metals sagged in the wake of a
stronger dollar. Spot gold and platinum were near
10-1/2-month lows of $1,122.35 and $885 an ounce hit overnight
while silver dropped to its lowest since June.
"The bearish factors for gold namely a high U.S. dollar,
rising yields and equities and risk-on investor demand appetite
leave bullion clearly on the defensive," said HSBC analyst
Copper was up 0.1 percent at $5,737 a tonne. It has
drifted down from a 17-month peak above $6,000 reached in
November on speculation that a Donald Trump presidency would
usher in fiscal stimulus and boost demand for metals.
Crude oil prices nudged higher as expectations that Kuwait
would cut supplies by a larger than expected amount as part of a
coordinated effort by oil producers to cut output offset
negative pressures from a bullish dollar.
Brent crude gained 0.5 percent to $54.28 a barrel.
(Reporting by Shinichi Saoshiro; Additional reporting by Swati
Verma in Bengaluru; Editing by Simon Cameron-Moore)