9:29 PM
HONG KONG | Thu Jan 27, 2011 9:03pm EST
HONG KONG (Reuters) - Asian stocks eased on Friday before a slew of earnings from corporate heavyweights in the region, while Japanese government bond futures rose despite a ratings cut.
* The MSCI index of Asian stocks outside Japan .MIAPJ00000PUS fell 0.3 percent in early deals despite an overnight rally on Wall Street. The Nikkei .N225 fell by more than 1 percent, weighed down by financial stocks.
* Since the start of 2011, Asian stocks have underperformed the MSCI world index .MIWD00000PUS, which has risen by 2.5 percent, as investors have booked profits, particularly in markets, which are seen vulnerable to inflationary pressures.
* On Thursday, Standard & Poor's cut Japan's credit rating by a notch for the first time since 2002 and Moody's warned that it might turn negative on the U.S. rating outlook if the deficit continued to swell.
* March 10-year futures opened lower, but quickly reversed losses to be up 0.17 points at 139.95 as the downgrade had largely been seen as a matter of time. On Thursday evening, it fell to as low as 139.48 immediately after the downgrade.
* Ten-year yields edged lower to 1.215 percent, moving further away from this month's peak of 1.260 percent hit last week.
* Citigroup analysts said the downgrade might dissuade regional reserve managers from investing in Japanese assets on the margin but won't trigger a large scale dumping of bonds.
* The euro held most of its 1 percent gain at 113.71 after hitting a two-month peak around 114.00. In contrast, the dollar, after rallying by a big figure to as high as 83.22 yen, it lapsed to 82.87 in early Asian trade.
* Gold held near four-month lows, after falling more than two percent in the previous session, as safe-haven demand was depressed by a steady drip of positive data from Europe and the United States.
(Additional reporting by Ayai Tomisawa and Shinichi Saoshiro in TOKYO)
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