January 26, 2018 / 12:32 AM / a year ago

CORRECTED-GLOBAL MARKETS-Asia stocks edge back from record highs, Trump comments support dollar

(Corrects reference to Australian market in 5th paragraph)

* MSCI Asia-Pacific index down 0.3 pct, Nikkei up 0.5 pct

* Dollar pulls back from 3-yr lows on Trump’s comments

* Dollar bounce weighs on crude oil, gold

By Shinichi Saoshiro

TOKYO, Jan 26 (Reuters) - Asian stocks edged back from record highs on Friday but were still poised to end the week with strong gains, while the battered dollar won back some ground after President Donald Trump said he wanted a strong U.S. currency.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.3 percent lower at 607.77 after reaching a record high above 610 on Wednesday, weighed down after Wall Street shares stalled overnight.

MSCI’s Asia-Pacific index was still poised to rise about 1.4 percent on the week and headed for its seventh straight week of gains.

World equity markets have rallied over the past year, buoyed by a synchronised uptick in global economic growth in a boon to corporate profits and stock valuations.

Australian markets were closed for a public holiday. The dollar’s bounce against the yen lifted Japanese stocks, with the Nikkei rising 0.5 percent.

The Dow and S&P 500 ended at their highest closing levels ever on Thursday although Wall Street relinquished bigger intraday gains after President Trump’s strong dollar comments.

Trump said on Thursday he ultimately wants the dollar to be strong, a contradiction of comments made previously by Treasury Secretary Steven Mnuchin one day earlier.

The dollar index against a basket of six major currencies was at 89.404. It had sunk to a three-year low of 88.438 on Thursday after Mnuchin said he welcomed a weaker greenback, which the markets initially took as Washington’s departure from its strong dollar policy.

“Trump did say he wanted a stronger dollar, but at the same time made no intention of changing his stance towards pursuing U.S. interest through trade policies,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“Comments from U.S. top officials regarding the dollar are likely continue to lack consistency going forward,” he said.

The euro was 0.1 percent lower at $1.2389, pulling back from $1.2538, its highest since December 2014 scaled on Thursday.

The common currency had soared to the fresh three-year high on Thursday after European Central Bank President Mario Draghi said economic data pointed to “solid and broad” growth with inflation likely to rise in the medium term from subdued levels.

Draghi also said the recent surge in the euro was a source of uncertainty, although this had little impact on the currency as some market participants had expected the ECB chief to use stronger language.

The dollar rose 0.1 percent to 109.575 yen rebounding from a four-month low of 108.500 set the previous day.

The pound was steady at $1.4140 following its ascent to a 1-1/2-year high of $1.4346 the previous day.

The Australian dollar was steady at $0.8029 after reaching a four-month peak of $0.8119 overnight.

The dollar’s bounce weighed on commodity prices, which had risen to multi-year peaks earlier this week. A stronger greenback tends to weigh on commodities as is seen making it more expensive for non-U.S. buyers of dollar-denominated products.

U.S. crude futures were 0.55 percent lower at $65.14 per barrel after reaching $66.66 on Thursday, highest since December 2014.

Likewise, gold also slipped. Spot gold extended overnight losses to $1,346.00 after setting $1,366.06 on Thursday, its highest since August 2016.

Editing by Sam Holmes

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