* Trump says dollar too strong, Fed should keep rates low
* N. Korea tensions lift S. Korea CDS to 9 1/2-mth high
* Europe stocks set for flat to lower open
* Asia ex-Japan rises; Nikkei closes down 0.7
* Oil prices dragged lower by growing U.S. supply
By Nichola Saminather
SINGAPORE, April 13 The U.S. dollar and Treasury
yields tumbled on Thursday on U.S. President Donald Trump's
comments favouring lower interest rates and tensions over North
Korea, while Asian stocks put in a mixed performance amid a raft
of regional economic data.
The dollar index, which tracks the greenback against
a basket of six trade-weighted peers, fell 0.6 percent to
100.07. U.S. Treasury yields slid to 2.232 percent, just
slightly above a five-month low of 2.221 hit earlier in the
European stocks look set for a muted start, with financial
spreadbetters expecting Britain's FTSE 100 and Germany's
DAX to ease 0.1 percent, and France's CAC 40
was seen steady.
MSCI's broadest index of Asia-Pacific shares outside Japan
was up about 0.6 percent.
Japan's Nikkei closed down 0.7 percent.
Australian stocks retreated 0.75 percent on declines
in the materials and energy sectors, shrinking gains for the
week to 0.45 percent, despite a surge in employment in March,
and an jobless rate that remained at 5.9 percent.
Chinese shares rose 0.1 percent, while Hong Kong
stocks added 0.2 percent.
Most markets in the region will be closed on Friday for the
Good Friday public holiday.
Escalating fears of a new weapons test by North Korea kept
investors on edge, as a U.S. carrier group sails towards the
area. Foreign journalists visiting the isolated state were told
to prepare for a "big and important event" on
The North Korea-related tensions have sent the cost to
protect South Korean government debt against default
soaring to 9 1/2-month highs.
But Korean stocks were up 0.8 percent and the Korean
won tacked on 0.6 percent after the central bank kept its
policy rate unchanged at 1.25 percent for a 10th straight month
on Thursday as expected, and upgraded its growth outlook.
The yuan rose 0.2 percent as the dollar wilted
after Trump said the greenback is getting too strong and that
would eventually hurt the U.S. economy.
In an interview with The Wall Street Journal, Trump also
said he would like to see U.S. interest rates stay low.
The president didn't rule out re-nominating Fed Chair Janet
Yellen once her four-year term is up next year.
"Trump's comments came at a time when some had begun to
think that perhaps the president was not as supportive of a weak
dollar as initially perceived," said Shin Kadota, senior
strategist at Barclays in Tokyo.
China's trade surplus with the U.S., the size of which has
also been a point of contention for Trump, widened in March from
February, customs data showed on Thursday.
China's overall trade surplus also rose in March after
logging its first deficit in three years in February.
The data came amid a warming of relations between China and
U.S., with Trump backing away from labeling China a currency
manipulator in an interview with the Wall Street Journal.
Trump said labeling China a currency manipulator now would
hurt talks with Beijing on dealing with North Korea's threats.
"The change in policy should certainly ease concerns over
the protectionist stance of the Trump administration that should
benefit emerging markets in general," James Woods, global
investment analyst at Rivkin in Sydney, wrote in a note.
"However it also continues to raise doubts about the
administration’s ability to deliver on campaign promises, which
include the all-important pledge for tax reform."
The dollar pared earlier losses to rise slightly to 109.07
yen, after touching a five-month low earlier in the
session. It is down 1.8 percent so far this week.
In commodities, oil prices fell on concerns about rising
U.S. crude slipped 0.1 percent to $53.05 a barrel,
extending Wednesday's 0.5 percent loss that saw it break a
six-session winning streak.
Global benchmark Brent was slightly lower at $55.84,
failing to make up any of Wednesday's 0.7 percent loss.
Gold pared earlier gains but hovered near a
five-month high hit earlier in the session. The precious metal
was down about 0.1 percent at $1,283.71 an ounce.
(Reporting by Nichola Saminather; Additional reporting by
Shinichi Saoshiro; Editing by Sam Holmes and Kim Coghill)