TOKYO: Asian stocks got off to a firm start on Tuesday, and the euro steadied but remained vulnerable after overnight comments from the European Central Bank chief heightened expectations of easing steps in the euro zone.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rose about 0.2 percent, while Japan's Nikkei stock average <.N225> added 0.8 percent in early trade, after it ended at a 7-week high on Monday.
"Markets were quiet overnight with both the U.S. and UK on holiday but sentiment has generally been well supported after the S&P 500 <.SPX> closed at a record high on Friday following additional evidence that U.S. housing activity is rebounding," strategists at Barclays wrote in a note to clients.
The holidays in the major markets crimped foreign exchange volumes to less than half of their daily averages. While thin conditions sometimes amplify market moves, major currency pairs quietly stuck to recent ranges.
The euro last stood at $1.3648, slightly up on the day but still not far from a three-month low of $1.3615 plumbed on Monday. Against the yen, it was also steady at 139.09 yen.
ECB chief Mario Draghi on Monday continued to hint at coming measures, saying the ECB must be "particularly watchful" for any negative price spiral in the euro zone, and that "more pre-emptive action may be warranted."
Later on Tuesday, Draghi is scheduled to participate in an armchair discussion in the final day of the ECB forum underway in Portugal.
The ECB is preparing a package of policy options for its June 5 meeting, Reuters reported. It includes cuts in all its interest rates as well as targeted measures aimed at boosting lending to smaller firms.
By contrast, current and former Japanese central bankers familiar with internal discussions say an informal debate is under way at the Bank of Japan on how to prepare for an eventual exit from its massive quantitative easing program.
The yen was steady against the dollar, which bought 101.93 and remained not far from its 1-1/2 week high of 102.05 marked on Monday.
Investors kept a wary eye on Ukraine, which launched air strikes and a paratrooper assault against pro-Russian rebels who seized an airport on Monday.
The escalation in the ongoing crisis was tempered by the decisive win for billionaire Petro Poroshenko in Ukraine's weekend presidential election, which many hope will help bring some stability to the situation.
In commodities trading, U.S. crude futures were down about 0.1 percent at $104.25 a barrel.- Reuters
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