Asian shares pause, caution before ECB

TOKYO (Reuters) - Asian shares and the euro paused on Thursday, with investors seeking clues from European Central Bank President Mario Draghi on growth prospects for the euro zone economy at a policy meeting later in the day, amid optimism that the worst may be over.

Japanese equities underperformed Asian bourses as a break in the yen selling pulled them from Wednesday's four-year peak. But shorter-dated Japanese government debt rallied, sending two-year JGB yields to their lowest since September 2002 at 0.030 percent, on expectations that the central bank will cut interest rates to zero.

The yen's broad weakness has been driven by expectations for radical reflationary policy from the Bank of Japan, under Prime Minister Shinzo Abe's push for a mix of anti-deflation policies.

"Hopes for 'Abenomics' are supporting the mood, but investors are also sensitive to the currency moves, so right now, even small uncertainty on Europe can be a reason to pull back," said Hiroichi Nishi, an assistant general manager at SMBC Nikko Securities.

Japan's Nikkei stock average <.n225> fell 0.8 percent, as investors took profits on export-driven firms. The benchmark closed at its highest level since October 2008 the day before when the yen slipped to fresh lows. <.t/>

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was down 0.1 percent near a one-week low, after reaching a 18-month high on Monday. Asia tracked overnight lackluster U.S. stocks, with Standard & Poor's 500 Index <.spx> ending nearly flat after a five-year high earlier in the week.

Australian shares gained 0.3 percent, outperforming their Asian peers, on a rise in iron ore prices supporting the top miners and on higher earnings from National Australia Bank and Telstra Corp. Australian jobs data for January beat market expectations.

Recent data suggesting a moderate global economic recovery, even if it lacked strong momentum, underpinned industrial metals, keeping London copper prices near four-month highs and platinum and palladium near their highest level in 17 months on hopes of a better demand.

Data from deflation-swamped Japan was also positive, with the country's core machinery orders surging unexpectedly in December for a third straight month of increases and firms expect more improvement in the first quarter.

But analysts said Asian economies were still relying on exports to power their way to growth.

"One of the pillars of our bullish view on Asian currencies at the start of the year was the theme of global rebalancing, in which Asian economies would move away from export-dependent growth models towards a more domestic demand-driven model, allowing their currencies to appreciate to dampen their export competitiveness in favor of stronger terms of trade," said Morgan Stanley in a research note.

"However, Asian economies have been slower in the rebalancing process than we had envisioned, as seen by the heavy physical and verbal FX intervention this year."

FATE OF DRAGHI MAGIC

Growing optimism that the euro zone economy may be nearing a bottom has propelled the euro to a 14-1/2-month high against the dollar, a 34-month peak against the yen and 15-month top on sterling.

The ECB is expected to keep interest rates at a record low 0.75 percent at later on Thursday. Traders will focus on any comments about the euro's recent strength as well as the bank's view on the euro zone economy.

Vassili Serebriakov, strategist at BNP Paribas, said the ECB will likely reason that the euro's strength is due to real improvement in the financial markets and economic outlook, and thus does not warrant immediate action.

"That said, our economists suggest that Mr. Draghi will probably soften the overall tone at the press conference, signaling that easing options are still available if needed," Serebriakov wrote in a client note.

Draghi's strong verbal commitment to defend the euro and the ECB's new bond-buying scheme to help ease funding strains in highly indebted euro zone members had significantly reduced risks of the region crumbling under the weight of its debt woes.

But a corruption scandal in Spain and uncertainty over the outcome of an Italian election later this month brought market focus back to the region's potential political instability.

Later on Thursday, Spain will test investor appetite by offering up to 4.5 billion euros of bonds.

The euro eased 0.1 percent to $1.3505. It hit a 14-1/2-month high against the dollar of $1.3711 last week and a 34-month peak against the yen of 127.71 on Thursday.

The dollar eased 0.2 percent to 93.45 yen after touching 94.075 yen, its highest since May 2010 on Wednesday. The euro fell 0.3 percent at 126.17 yen, off Wednesday's 127.71 yen, its strongest since April 2010.

U.S. crude rose 0.2 percent to $96.81 a barrel.

(Additional reporting by Ian Chua in Sydney and Ayai Tomisawa in Tokyo; Editing by Sanjeev Miglani)

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Tsunami Fear After Quake Off Solomons

AUCKLAND, New Zealand — Residents of the South Pacific from island chains to Australia were alerted to the possibility of a damaging tsunami on Wednesday after an 8.0-magnitude earthquake off the Solomon Islands, according to scientists and news reports from the area, but the warnings were called off a few hours later.

Ednal Palmer, the chief reporter of the newspaper The Solomon Star in Honiara, the capital of the Solomon Islands, said in a telephone interview that reports from Lata, the capital of Temotu Province, were sketchy but indicated that a wave had apparently struck three villages.

“We have heard that a wave 103 centimeters high” — nearly three and a half feet — “has hit Lata, swamping the town, and five people are still missing at the moment,” Mr. Palmer said.

Lata, where the quake struck, is in Temotu Province, where the population is around 30,000. It is a three-hour flight from Honiara, which was not damaged by the earthquake or the tsunami.

Mr. Palmer said Honiara residents were not concerned about the tsunami. “Most of us are getting ready for tonight’s UB40 concert,” he said.

The Pacific Tsunami Warning Center said on its Web site, “Sea level readings indicate a tsunami was generated.” The earthquake struck around 11 a.m. local time in the Santa Cruz Islands, part of the Solomon chain. There were conflicting reports as to the depth of the quake.

The center said the tsunami warning was limited to the Solomon Islands, Vanuatu, Nauru, Papua New Guinea, Tuvalu, New Caledonia, Kosrae, Fiji, Kiribati, and Wallis and Futuna.

A lesser alert, a tsunami watch, was declared for American Samoa, Australia, Guam, the Northern Marianas, New Zealand and eastern Indonesia.

The earthquake was not only powerful but also shallow, giving it significant potential to cause damage, said Barry Hirshorn, a geophysicist with the National Weather Service in Hawaii. Moreover, it was a thrust earthquake, he said, meaning that the sea floor moved up or down, not sideways, contributing to the potential for a dangerous tsunami.

But after the earthquake, as scientists watched to see how far a tsunami might spread, there were few early indications of a major threat beyond the immediate area, Mr. Hirshorn said. A water rise of about three feet had been observed close to the quake, he said, still high enough to be potentially damaging but probably not big enough to threaten distant shores.

In New Zealand, thousands of people were at the beach, swimming in the sea on a glorious summer afternoon on Waitangi Day, a national holiday — quite oblivious to the potential for a tsunami. Tsunami sirens were set off late in the afternoon there, and people in coastal areas were being told to stay off beaches and out of the sea, rivers and estuaries.

The New Zealand Herald reported Wednesday afternoon on its Web site that tsunami sirens in Suva, the capital of Fiji, had been warning people to stay inside or go to higher ground.

The Sydney Morning Herald reported on its Web site on Wednesday that the Solomon Islands’ National Disaster Management Office had advised those living in low-lying areas, especially on Makira and Malaita, to move to higher ground.

This article has been revised to reflect the following correction:

Correction: February 6, 2013

An earlier version of this article misspelled the given name of the chief reporter of The Solomon Star. He is Ednal Palmer, not Edmal.

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Kim Kardashian's Pregnancy Is No Reason to Speed Divorce, says Kris Humphries

By Mike Fleeman

02/05/2013 at 09:20 PM EST

Kris Humphries and Kim Kardashian

Seth Browarnik/StarTraks

Kim Kardashian's baby is not even born yet and already is being drawn into mama's divorce.

Kardashian, carrying boyfriend Kanye West's child, has bristled at what she sees as stall tactics by estranged husband Kris Humphries to close the legal books on their 72-day marriage.

But Humphries's lawyer Marshall W. Waller writes that "what is really going on here is that an 'urgency' in the form of an apparently unplanned pregnancy" is being used by Kardashian as "an opportunity to gain a litigation advantage (to) prematurely set this matter for trial."

He adds parenthetically that the pregnancy is "something (Humphries) had nothing to do with."

Waller explains his reasoning for calling the pregnancy as unplanned: "Indeed, why would (she) plan to get pregnant in the midst of divorce proceedings?"

Kardashian, herself, recently addressed the timing.

"God brings you things at a time when you least expect it," she said last month. "I'm such a planner and this was just meant to be. What am I going to? Wait years to get a divorce? I'd love one. It's a process."

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Critics seek to delay NYC sugary drinks size limit

NEW YORK (AP) — Opponents are pressing to delay enforcement of the city's novel plan to crack down on supersized, sugary drinks, saying businesses shouldn't have to spend millions of dollars to comply until a court rules on whether the measure is legal.

With the rule set to take effect March 12, beverage industry, restaurant and other business groups have asked a judge to put it on hold at least until there's a ruling on their lawsuit seeking to block it altogether. The measure would bar many eateries from selling high-sugar drinks in cups or containers bigger than 16 ounces.

"It would be a tremendous waste of expense, time, and effort for our members to incur all of the harm and costs associated with the ban if this court decides that the ban is illegal," Chong Sik Le, president of the New York Korean-American Grocers Association, said in court papers filed Friday.

City lawyers are fighting the lawsuit and oppose postponing the restriction, which the city Board of Health approved in September. They said Tuesday they expect to prevail.

"The obesity epidemic kills nearly 6,000 New Yorkers each year. We see no reason to delay the Board of Health's reasonable and legal actions to combat this major, growing problem," Mark Muschenheim, a city attorney, said in a statement.

Another city lawyer, Thomas Merrill, has said officials believe businesses have had enough time to get ready for the new rule. He has noted that the city doesn't plan to seek fines until June.

Mayor Michael Bloomberg and other city officials see the first-of-its-kind limit as a coup for public health. The city's obesity rate is rising, and studies have linked sugary drinks to weight gain, they note.

"This is the biggest step a city has taken to curb obesity," Bloomberg said when the measure passed.

Soda makers and other critics view the rule as an unwarranted intrusion into people's dietary choices and an unfair, uneven burden on business. The restriction won't apply at supermarkets and many convenience stores because the city doesn't regulate them.

While the dispute plays out in court, "the impacted businesses would like some more certainty on when and how they might need to adjust operations," American Beverage Industry spokesman Christopher Gindlesperger said Tuesday.

Those adjustments are expected to cost the association's members about $600,000 in labeling and other expenses for bottles, Vice President Mike Redman said in court papers. Reconfiguring "16-ounce" cups that are actually made slightly bigger, to leave room at the top, is expected to take cup manufacturers three months to a year and cost them anywhere from more than $100,000 to several millions of dollars, Foodservice Packaging Institute President Lynn Dyer said in court documents.

Movie theaters, meanwhile, are concerned because beverages account for more than 20 percent of their overall profits and about 98 percent of soda sales are in containers greater than 16 ounces, according to Robert Sunshine, executive director of the National Association of Theatre Owners of New York State.

___

Follow Jennifer Peltz at http://twitter.com/jennpeltz

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Asian shares recover on firm euro zone data, yen slips

TOKYO (Reuters) - Asian shares recovered on Wednesday as solid euro zone data calmed nerves jarred by potential political turmoil in Spain and Italy, while the prospect of a dovish new governor for the Bank of Japan dragged the yen to a new low.

Sentiment for other risk assets also improved, pushing London copper up 0.4 percent to $8,302.75 a tonne to a near four-month high, while Brent crude hovered near a 20-week high. Signs of recovery taking root in Europe, the United States and China have helped improve the demand outlook.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> added 0.3 percent, tracking an overnight gain in global equities on data showing the U.S. services sector extended a three-year expansion in January and business activity in the euro zone climbed to a 10-month high last month.

The Standard & Poor's 500 Index <.spx> and the Nasdaq Composite Index <.ixic> gained over 1 percent.

In Asia, investors have been quick to book profits as prices approached their highs, but analysts and traders say any dip was likely to be seen as a chance to buy back into the market.

The pan-Asian index scaled a 18-month high on Monday, and was up about 2.3 percent so far this year, considerably modest compared to the S&P's nearly 6 percent gain in the same period.

Australian shares <.axjo> jumped 0.9 percent, leading the regional peers.

"We're following on from a pretty good lead from global markets last night," said Steve Daghlian, market analyst at Commonwealth Securities, of Australian equities.

Brent crude was up 0.2 percent to $116.72 a barrel while U.S. crude was barely changed at $96.64.

Japanese equities and government bonds rose while the yen touched fresh lows on expectations for stronger reflationary policies from the BOJ.

The dollar touched 93.91 yen to its highest since May 2010, while the euro also rose to 127.65 yen, its loftiest since April 2010. The Aussie reached a 4-1/2 year peak around 97.42 yen. The pound touched a 3-year high near 147.25 yen.

Yen selling resumed after Bank of Japan Governor Masaaki Shirakawa said he would step down on March 19, three weeks earlier than the official end of his five-year term, leaving at the same time as his two deputies, and raising the prospect that the next BOJ governor will more readily adopt the expansionist monetary policy demanded by Prime Minister Shinzo Abe.

"The Bank of Japan is about to get a lot more dovish, and sooner than previously thought," said Christopher Vecchio, a currency analyst at DailyFX.

Japan's benchmark Nikkei stock average <.n225> soared 3.1 percent to a 33-month high. <.t/>

"I think the market could yet rise when they announce the new governor's name, particularly if it makes an asset purchase budget of 50 trillion yen ($535 billion) from the BOJ more likely," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley.

The 10-year JGB yield fell 1.5 basis points to 0.775 percent after opening higher, at 0.800 percent.

The euro drew support from growing confidence in the region's economy and improving funding conditions for deeply-indebted euro zone members.

News the European Central Bank's balance sheet fell to an 11-month low of 2.8 trillion euros ($3.8 trillion) as markets unwound some of the ECB's crisis funding measures underpinned the euro, coming in stark contrast to the U.S. Federal Reserve and the BOJ which keep expanding asset buying.

"Flows matter more than stock in currency markets when comparing central bank balance sheets ... highlighting the euro's outperformance over the last few months," said Ashraf Laidi, chief global strategist at City Index, in a note to clients.

The euro was steady at $1.3578, above a key technical support of its 14-day moving average at $1.34653.

The ECB is expected to keep interest rates unchanged at its policy meeting on Thursday, but its president may face a grilling over an Italian banking scandal.

Spanish and Italian yields fell on Tuesday after jumping on worries over a corruption scandal in Spain and polls showing Italy's former prime minister Silvio Berlusconi regaining ground before elections this month.

The yen's fall lifted benchmark Tokyo gold futures to a record high of 5,067 yen per gram on Wednesday.

(Additional reporting by Ian Chua and Thuy Ong in Sydney and Ayai Tomisawa and Sophie Knight in Tokyo; Editing by Sanjeev Miglani)

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India Ink: Five Questions For: Journalist and Author Mary Harper

Mary Harper, the Africa editor at the BBC World Service, is the author of “Getting Somalia Wrong? Faith, War and Hope in a Shattered State,” which was released in February 2012. While she is particularly interested in Somalia, which she visits regularly, Ms. Harper has reported from several other African conflict zones, including Algeria, the Democratic Republic of Congo, Liberia, Sierra Leone and Sudan. India Ink interviewed Ms. Harper at the Jaipur Literature Festival.

What are the occupational hazards of being a writer?

It is interesting how different the experience of being a writer is to being a journalist. As a journalist, you’re a writer as well, but I never realized that the two things would be so completely different. I’m a broadcast journalist so I normally write pieces that are about 30 seconds or one minute long so the challenge of writing a book was pretty big for me.

It was a slow start, but once I got into it, it was like I was a thing possessed, and I could not stop doing that. The research in a way was about 20 years of working in Somalia, and I did a lot of reading for it as well, which took about a year. But the actual writing of it took me about six months, and I did that at the same time as I was working for the BBC. So I had virtually no time for anything and had to be really focused.

What is your everyday writing ritual?

I couldn’t work at home, and I didn’t write my book at the BBC. I wrote it in two libraries in London because I kind of needed to be with other people who were working quietly. One of them is the library at the School of Oriental and African Studies, which was brilliant in terms of the resources.

My favorite place to really write was in the British Library. It’s funny because it’s quite easy to join and it’s free for all, but there was a place in the top floor called Africa room or something, and there was this chair in there that I thought of as mine, and if ever anyone was sitting on that chair I used to get angry. It was a public library so it was kind of terrible that I used to get possessive about that chair. But if someone else was sitting there, I would walk past them and try to stare them away.

Why should we read your latest book?

The image that most people have of Somalia is that it’s a land full of pirates, starving people and terrorists. I got so tired of writing the pirate stories. Even at the BBC, they called me the “pirate queen” because I was the one who used to interview the pirates and things. I got this reputation as a person who covers piracy, and it was driving me mad.

And it was actually things like that made me want to tell the story of Somalia that I saw whenever I went there, which didn’t match the way that it was portrayed. I wanted to talk about the amazing economic dynamism of people, the money that is in the country, the fact that Africa’s biggest money transfer company is based there, the fact that large parts of the territory that function as if they were independent countries, the fact that they have incredibly cheap and efficient mobile phone services — they use their mobile phones to pay money – all sorts of things like that that were just not being talked about.

It was almost like there was a conspiracy against telling those stories because they didn’t fit into that Western image of Africa as the dark, hopeless, conflict-ridden, famine-ridden continent.

How do you deal with your critics?

Certainly, writing about Somalia, you are definitely going to get some vicious criticism from Somalis because they are incredibly opinionated, and they are never afraid to tell you exactly what they think. I was expecting more – I was actually surprised by how well received my book has been by Somalis.

Of course, I’ll get very targeted specific attacks on certain subjects. But I think because I was so careful when I wrote my book, I feel comfortable with every single word . So even if someone doesn’t agree with me, I feel capable of explaining why I said the things I said.

Why does the Jaipur Literature Festival matter to you?

It’s just been the most magical experience. It’s interesting because the last literature festival I attended was this one in this part of Somalia called Somaliland. It’s a tiny little festival, but actually there are lots of parallels. And what I loved about that one is that in this country that is associated with war you saw how literature and art and poetry allow people to think about other things and actually start doing other things.

And here, just seeing the enthusiasm of the crowd — we were joking before we went on to the panel about Africa that no one’s going to come – and in fact it was packed! The fact that there is this thirst for knowledge and this thirst for stimulating debate all over the world is just so encouraging. And maybe this sounds a little silly and romantic, but you kind of wish that people would spend more time doing things like this than starting wars.

(This interview has been lightly edited and condensed.)

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Jillian Michaels: My Son Phoenix Is 'Fiery' Like Me

Mom & Babies
Celebrity Baby Blog

02/04/2013 at 03:00 PM ET

Gregg DeGuire/WireImage

Jillian Michaels‘ son Phoenix is already taking after his mama — just not the expected one!

Although The Biggest Loser trainer expected her baby boy to inherit her partner’s laidback approach to life — Heidi Rhoades delivered their son in May — the 8-month-old’s budding personality is the polar opposite.

“He wants to walk and he gets really pissed about it when he can’t. He gets frustrated,” Michaels, 38, told PEOPLE at the recent TCAs.

“He’s a fiery little sucker, he’s just like me. I’m like, ‘You were supposed to be like Heidi!’ But he’s not. It’s not good, not good.”

Admitting she is “terrified for when he’s a teenager,” Michaels has good reason to be: Recently she spotted her son — who is “crawling aggressively” — putting his electrician skills to the test in the family room.

“He’s into everything, which is kind of a nightmare to be totally honest,” she says. “We have an outlet in the floor in the living room and I caught him eating the outlet on the floor … I was like, ‘Mother of God!’”

Phoenix’s big sister Lukensia, 3, has also been busy keeping her mamas on their toes. “Lu just had her first ski trip and she had a little crush on her teacher, Ollie,” Michaels shares.

“At first I was like, ‘Oh my God, we’re letting our baby go!’ The second day we took her she ran right to him — loves Ollie.”

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Bullying study: It does get better for gay teens

CHICAGO (AP) — It really does get better for gay and bisexual teens when it comes to being bullied, although young gay men have it worse than their lesbian peers, according to the first long-term scientific evidence on how the problem changes over time.

The seven-year study involved more than 4,000 teens in England who were questioned yearly through 2010, until they were 19 and 20 years old. At the start, just over half of the 187 gay, lesbian and bisexual teens said they had been bullied; by 2010 that dropped to 9 percent of gay and bisexual boys and 6 percent of lesbian and bisexual girls.

The researchers said the same results likely would be found in the United States.

In both countries, a "sea change" in cultural acceptance of gays and growing intolerance for bullying occurred during the study years, which partly explains the results, said study co-author Ian Rivers, a psychologist and professor of human development at Brunel University in London.

That includes a government mandate in England that schools work to prevent bullying, and changes in the United States permitting same-sex marriage in several states.

In 2010, syndicated columnist Dan Savage launched the "It Gets Better" video project to encourage bullied gay teens. It was prompted by widely publicized suicides of young gays, and includes videos from politicians and celebrities.

"Bullying tends to decline with age regardless of sexual orientation and gender," and the study confirms that, said co-author Joseph Robinson, a researcher and assistant professor of educational psychology at the University of Illinois in Urbana-Champaign. "In absolute terms, this would suggest that yes, it gets better."

The study appears online Monday in the journal Pediatrics.

Eliza Byard, executive director of the Gay, Lesbian & Straight Education Network, said the results mirror surveys by her anti-bullying advocacy group that show bullying is more common in U.S. middle schools than in high schools.

But the researchers said their results show the situation is more nuanced for young gay men.

In the first years of the study, gay boys and girls were almost twice as likely to be bullied as their straight peers. By the last year, bullying dropped overall and was at about the same level for lesbians and straight girls. But the difference between men got worse by ages 19 and 20, with gay young men almost four times more likely than their straight peers to be bullied.

The mixed results for young gay men may reflect the fact that masculine tendencies in girls and women are more culturally acceptable than femininity in boys and men, Robinson said.

Savage, who was not involved in the study, agreed.

"A lot of the disgust that people feel when you bring up homosexuality ... centers around gay male sexuality," Savage said. "There's more of a comfort level" around gay women, he said.

Kendall Johnson, 21, a junior theater major at the University of Illinois, said he was bullied for being gay in high school, mostly when he brought boyfriends to school dances or football games.

"One year at prom, I had a guy tell us that we were disgusting and he didn't want to see us dancing anymore," Johnson said. A football player and the president of the drama club intervened on his behalf, he recalled.

Johnson hasn't been bullied in college, but he said that's partly because he hangs out with the theater crowd and avoids the fraternity scene. Still, he agreed, that it generally gets better for gays as they mature.

"As you grow older, you become more accepting of yourself," Johnson said.

___

Online:

Pediatrics: http://www.pediatrics.org

It Gets Better: http://www.itgetsbetter.org

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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Asian shares drop on euro zone worry, soft U.S. data

TOKYO (Reuters) - Asian shares slid on Tuesday as investors saw opportunities to cash in from recent strong rallies in the face of weak U.S. data and worries that a potential political shake-up could disrupt the eurozone's efforts to resolve its debt crisis.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> tumbled 0.8 percent, dragged lower by a steep 1.8 percent fall in Hong Kong shares <.hsi>.

The euro took the brunt of renewed focus on the euro zone problems, having risen 2.3 percent so far this year against the U.S. dollar, up about 5.4 percent against sterling and 1.8 percent higher against the Australian dollar.

The euro eased 0.1 percent to $1.3496, retreating further from Friday's 14-1/2-month peak of $1.3711, ahead of the European Central Bank's policy meeting on Thursday.

The euro's fall helped euro/crosses recover, underpinning such currencies as the Australian dollar against the U.S. unit.

Aussie eased 0.1 percent to $1.0423 after the Reserve Bank of Australia kept its cash rate steady at 3.0 percent, as expected, having just cut in December.

Spain's opposition party on Sunday called for Prime Minister Mariano Rajoy to resign over a corruption scandal, an allegation Rajoy denies, pushing Spanish 10-year bond yields to six-week highs.

In Italy, 10-year Italian government bond yields hit their highest since late December, as chances of former prime minister Silvio Berlusconi regaining power raised worries about Rome's ability to fix its fiscal problems.

"Markets have been increasingly comfortable with European risks over the past few months and are largely not positioned for this increase in political problems. The outcomes in Spain and Italy are far from certain and may represent stumbling blocks for further expansion in risk appetite," Barclays Capital said in a research note.

The yen took a breather, firming from lows against a broad range of currencies.

The dollar was down slightly at 92.31 yen after scaling its highest since May 2010 of 93.185 on Monday, while the euro eased 0.1 percent to 124.61 yen, off its loftiest since April 2010 of 126.97 hit on Friday.

"Markets are broadly undergoing a correction and the euro is definitely facing profit-taking, given the pace of its climb. Worries about the euro zone debt crisis always remain a downside risk for the euro, and could push it lower to $1.32-$1.33," said Hiroshi Maeba, head of FX trading Japan at UBS in Tokyo. "But the trend is still upward for dollar/yen, cross/yen. The dollar could reach 95 yen by the end of the month."

As long as markets hold out expectations for the Bank of Japan to implement aggressive monetary easing to beat decades of deflation in Japan, the yen will stay pressured. Any correction to the dollar's rise against the yen was also be seen as shallow, with many traders and analysts seeing a firm floor around 87-88 yen.

Relatively positive data from China on Tuesday failed to change the bearish mood, weighed down by a fall in overnight U.S. equities, which have rallied 6 percent so far this year, on discouraging U.S. factory orders and euro zone jitters.

The HSBC services purchasing managers' index rose to a four-month high of 54 in January from December's 51.7, underlining confidence in the world's second-biggest economy, which is expected to grow 8.1 percent this year, off a 13-year low of 7.8 percent hit in 2012.

"The data globally is unquestionably better but the recovery still seems gradual. (China) hit the bottom and they had a bit of a bounce but nothing much else happened. We don't really seem to have preconditions for a much stronger bounce than that (8 percent growth)," said Richard Yetsenga, Head of Global Markets at ANZ Research.

Japan's benchmark Nikkei stock average <.n225> fell 1.3 percent, after scaling a 33-month high on Monday. <.t/>

U.S. stocks slid on Monday, leaving the Standard & Poor's 500 Index <.spx> at its worst day since November after the index rose just 60-odd points away from its all-time intraday high of 1,576.09 on Friday.

(Editing by Eric Meijer)

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India Ink: 'Lalla Roukh' at the Rose Theater

Richard Termine for The New York Times

Lalla Roukh Marianne Fiset and Emiliano Gonzalez Toro starred in this work presented by Opera Lafayette on Thursday at the Rose Theater.

On Thursday evening Opera Lafayette presented a graceful and witty production of Félicien David’s “Lalla Roukh” at the Rose Theater. This opéra-comique set in Mughal India had fallen into oblivion since its wildly successful premiere in 1862, well ahead of the wave of other French operas like Bizet’s “Pêcheurs de Perles,” Delibes’s “Lakmé” or Meyerbeer’s “Africaine.”

Operas like these, in which the West’s flirtation with distant locales is colored with condescension, can bring on a toothache in the stage director who has to choose between an unreconstructed eye-candy approach or a Splenda version that leaves an aftertaste of postcolonial embarrassment.

Here the director, Bernard Deletré, devised an unusual solution when he brought in an Indian fashion designer, Poonam Bhagat, and the exquisite Kalanidhi dance troupe choreographed by Anuradha Nehru to add vibrant touches of authenticity to the dress and movement of characters who otherwise seem less rooted in South Asia than in commedia dell’arte. The spoken dialogue was edited down to its dramatic essentials and delivered with great clarity by the glowing cast of singers, most of whom were native French speakers. Together with Ryan Brown, who conducted with a fine ear for flow and comic timing, they made a solid case for “Lalla Roukh” as an overlooked gem of more than historical interest.

The heroine is a princess from Delhi who travels to Bukhara to marry its king. On a mountain pass in Kashmir she is waylaid by a silver-tongued poet with whom she falls in love. She arrives at the court determined to throw over the royal match in favor of the penniless poet, but it turns out that he was in fact the king disguised to test Lalla Roukh’s heart.

The opera contains exquisite musical moments, like the ballet in Act I in which the chorus evokes the starry sky reflected in a clear mountain lake with filigree woodwind solos against caressing choral lines. The following ballet of bayadères is carried by lively rhythms on an array of exotic percussion instruments, here joined by the ankle bells of the dancers.

Although David’s Orientalism is never authentic, it is still rich in naturalistic touches. As a young man he spent two years in Cairo and his familiarity with non-Western modes comes through in finely wrought oboe solos, alluring chromatic vocal lines and, in one aria, pizzicato passages meant to imitate the sound of a guzla.

Marianne Fiset sang the title role with a glowing, well-supported soprano that brought out the Jane Austen-like independence and likability of her character. The tenor Emiliano Gonzalez Toro was outstanding as the poet-king Noureddin, bringing a scintillating array of nuances to a character who is by turns comic, regal and wistful. The role of Lalla Roukh’s quick-witted maid, Mirza, was sung by Nathalie Paulin with a honeyed soprano. Mr. Deletré, the director, stepped into the buffoonish role of Baskir, the king’s chamberlain, with conviction and comic abandon.

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