* Yen's slide halts just before 100 to dlr
* BOJ action keeps global bond yields near lows
* Benign China inflation data boosts sentiment
* U.S. stocks reflect earnings and China data
NEW YORK, April 9 The yen rallied on Tuesday,
snapping a three-day decline against the dollar and euro as it
neared 100 to the dollar, while a fall in Chinese inflation and
expectations for modest growth in U.S. corporate earnings helped
The Japanese currency weakened to 99.66 to the dollar, using
Reuters data, the greenback's strongest level against the yen
since May 2009, before the sell-off in the yen stalled. The euro
peaked at 129.93 yen, its highest since January 2010.
Analysts believe it is only a matter of time before the
dollar sails past the 100 yen mark.
"Given the breadth of yen bearishness, any reprieve would
likely encourage investors to re-establish short yen positions
at more favorable exchange rates," said Joe Manimbo, senior
market analyst at Western Union Business Solutions in
Tuesday's dollar selling left the greenback down 0.3 percent
at 99.10 yen, while the euro was off 0.1 percent on the
day at 129.17 yen.
The U.S. currency has still gained around 7 percent against
the yen since the Bank of Japan unveiled a massive stimulus
program last Thursday involving large purchases of long-term
Japanese government bonds.
The BOJ's bold measures have had a major impact on the
world's main debt markets, sending Japanese government yields
down sharply and spurring a search for higher-yielding assets,
which has caused yields to fall on U.S. and euro zone bonds.
"Markets are increasingly focused on the notion that larger
JGB purchases, at longer maturities, by the BOJ could push
Japanese domestic long-term investors elsewhere," said Vassili
Serebriakov, strategist at BNP Paribas in London.
However, yields on highly rated euro zone bonds moved up
from record lows on Tuesday as investors began to position for
fresh government debt auctions.
German 10-year bond yields were higher at 1.262 percent,
having hit 1.2 percent on Friday, their lowest
level since mid-2012 before European Central Bank President
Mario Draghi promised to do whatever it took to save the euro.
U.S. Treasuries prices rose to session highs ahead of the
Federal Reserve's regular purchase of long-dated government
debt, part of its quantitative easing program to lower
Benchmark 10-year Treasury notes last traded up
5/32 in price for a yield of 1.726 percent, down 1.9 basis
points from late on Monday.
Equity markets were mostly higher as investors hoped for
more accommodative monetary policy from China following benign
inflation data and after U.S. resources giant Alcoa posted
The Dow Jones industrial average was up 4.46 points,
or 0.03 percent, at 14,617.94. The Standard & Poor's 500 Index
was up 0.56 points, or 0.04 percent, at 1,563.63. The
Nasdaq Composite Index was up 3.16 points, or 0.10
percent, at 3,225.41.
A significant driver of the rally has been the extraordinary
stimulus measures from the Federal Reserve. With the start of
corporate earnings season for the first quarter, investors will
be looking at company forecasts to gauge whether the
fundamentals are strong enough to keep stocks climbing higher,
said Rick Meckler, president of LibertyView Capital Management
in Jersey City, New Jersey.
"The rally will be confirmed if earnings can stay strong and
if companies can continue to thrive even as government spending
is reduced, and I think it will falter if it proves (companies)
are unable to do so," said Meckler.
Alcoa Inc AA.N, the first Dow component to release results,
reported a higher quarterly profit but lower-than-expected
revenue after the bell on Monday. Shares of the largest U.S.
aluminum producer were little changed at $8.37
MSCI's world equity index, which tracks
share prices in 45 countries, was up 0.3 percent
China's annual consumer inflation cooled in March as food
prices eased from nine-month highs and producer price deflation
deepened, data showed on Tuesday, leaving policymakers room to
keep monetary conditions easy and nurture a nascent recovery.
The Chinese data underpinned demand for copper, which
climbed to a two-week high of $7,609 a tonne on the London Metal
Exchange before paring slightly to trade at $7,605 a
tonne, up 2.1 percent.
Brent oil also gained on the Chinese data, and a stalemate
in talks between Iran and Western nations over its nuclear
program and rising tensions on the Korean peninsula also
Brent rose 0.1 percent to $104.79. U.S. oil futures
were little changed at $93.36 a barrel and