Japan shares jump as yen bows to strong dollar

SYDNEY (Reuters) – Asian shares followed by Wall Street on a dollar from the US dollar. .

Japan's Nikkei. N225 leap out of the blocks with a 1 percent gain as a weakening yen promised to fatten exporters' profits.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.16% and South Korea's market .KS11 0.85 percent.

Federal Reserve Chairman Jerome Powell stuck with an upbeat assessment on the U.S. economy while downplaying the impact of global trade risks on the outlook for rises.

"The outlook is one of two," said Barclays economist Michael Gaspen.

"The main risk is that individuals, business, and financial markets have underestimated the desire of Trump to re-orient trade flows and that further steps to implement a slow down in hiring, a correction in equity markets, "he added.

BofA Merrill Lynch's latest fund manager survey showed more than 60 percent of respondents.

For now, U.S. companies seem to be profiting from high-powered gear cuts. Analysts now see second-quarter S & P 500 earnings growth of 21.2 percent, up from 20.7 percent on July 1.

Of the 39 companies in the index that have reported so far, 84.6 percent have come in ahead of Street expectations. The Dow .DJI ended Tuesday up 0.22 percent, while the S & P 500 .SPX gained 0.40 percent and the Nasdaq .IXIC 0.63 percent.

POUND IN PERIL

Powell's support for more than two-year Treasury yields US2YT = RR to the highest in nearly a decade and lifted the dollar broadly.

Against a basket of currencies, the dollar was up at 95.045 .DXY, after jumping 0.46 percent overnight. It also climbed to its highest since January against the yen at 113.07.

The euro was stuck at $ 1.1655, after weakening 0.4 percent on Tuesday.

The pound of the British Prime Minister is just another member of the House of Commons.

Bank of England Governor Mark Carney warned a no-deal Brexit would have "big" economic consequences and force a review of plans to raise interest rates.

Sterling was last huddled at $ 1.3104 BP = D3, after sliding 0.9 percent overnight.

The rising U.S. dollar coupled with the prospect of higher U.S. interest rates spelt disorder for gold, which crashed through major chart support to hit a one-year low.

Spot gold XAU = was 1.1 percent lower at $ 1,226.91 per ounce, having cratered at $ 1,225.58. The precious metal is less than 5 percent for the year.

Oil prices also eased early on Wednesday, with Brent LCOc1 off 53 cents at $ 71.63 a barrel. U.S. crude CLc1 was quoted down 31 cents at $ 67.77 a barrel.