Asian shares up

TOKYO (Reuters): Asian shares rose on Wednesday as firm demand at Spanish debt sales, positive U.S. corporate earnings and an improvement in a key German sentiment survey boosted investor confidence in riskier assets.

MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.9 percent on Wednesday, led by Australian shares which charged to a two-week high, following a rally in European and U.S. equities the previous day that saw Wall Street stocks scoring their biggest gain in a month.

Japan’s Nikkei average jumped 1.7 percent.

“There is a sense of relief after markets cleared one hurdle, with Spanish yields falling after successful short-term debt sales,” said Hirokazu Yuihama, a senior strategist at Daiwa Securities in Tokyo.

“Markets are undergoing a consolidation phase after a strong rally earlier in the year, and if Spain’s bond auctions on Thursday pass without a problem, investors will likely become more committed to risk-taking,” he said.

Spain sold a more-than-planned 3.2 billion euros ($4.21 billion) of 12- and 18-month bills on Tuesday due to good demand from domestic banks, easing some concerns about the country’s refinancing ability.

Yields on 10-year Spanish government bonds fell back below the 6 percent level reached on Monday, when concerns over the banking system, deficit and recession flared up. Spain faces a far more significant challenge on Thursday, with an auction of two- and 10-year bonds.

The euro erased earlier gains to hold steady around $1.3110 , but recovering from a two-month low near $1.2994 hit on Monday and returning to the middle its recent trading range.

As the dollar firmed against a basket of major currencies , riskier currencies such as the Australian dollar also pared earlier gains. The Aussie stood just below $1.04.

Asian credit markets firmed, with the spread on the iTraxx Asia ex-Japan investment-grade index tightening by 6 basis points.