GLOBAL MARKETS-Asian stocks hit 2-year top, Nikkei bounces as Berkshire buys in

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Nikkei rallies, hopes new PM will stick with stimulus
* Dollar near two-year trough as Fed commits to easy policy
* Risk of future inflation pushes up U.S. long-term yields

By Wayne Cole
SYDNEY, Aug 31 (Reuters) - Asian shares notched a fresh
two-year high on Monday as investors wagered monetary and fiscal
policies globally would stay super stimulatory for a protracted
period, keeping the safe-haven dollar on the defensive.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS added 0.2% to reach its highest since June 2018,
extending a 2.8% rise last week.
Tokyo's Nikkei .N225 rallied 1.4% aided by news Warren
Buffett's Berkshire Hathaway BRKa.N had bought more than 5%
stakes in each of the five leading Japanese trading
companies. The Nikkei had dipped on Friday after Prime Minister Shinzo
Abe's resignation stirred doubts about future fiscal and
monetary stimulus policies.
Those concerns were eased somewhat by news Chief Cabinet
Secretary Yoshihide Suga, and a close ally of Abe, would join
the race to succeed his boss. A slimmed-down leadership contest
is likely around Sept. 13 to 15. The next event of note in Asia will be China's official
manufacturing PMI survey for August which is forecast to show a
slight improvement to 51.2 as the recovery there continues.
The U.S. ISM manufacturing survey is also expected to show a
continued pick up in activity in August, while August payrolls
on Friday are forecast to rise 1.4 million with the unemployment
rate dipping to a still painfully-high 9.8%.
A host of Federal Reserve officials are set to speak this
week, kicking off with Vice Chair Richard Clarida later Monday
as they put more flesh on the bank's new policy framework
Fed Chair Jerome Powell boosted stock markets last week by
committing to keep inflation at 2% on average, allowing prices
to run hotter to balance periods when they undershot.
The risk of higher inflation in the future, assuming the Fed
can get it there, was enough to push up longer-term Treasury
yields and sharply steepen the yield curve.
Yields on 30-year bonds US30YT=RR jumped almost 16 basis
points last week to stand at 1.508%, 137 basis points above the
two-year yield. The spread was now approaching the June gap of
146 basis points which was the largest since late 2017.
That shift was of little benefit to the U.S. dollar given
the prospect of short rates staying super-low for longer, and
the currency fell broadly.
Early Monday, the dollar index was down at 92.211 =USD and
just a whisker above the recent two-year low of 92.127. The euro
edged higher to $1.1915 EUR= , having climbed 0.9% last week.
Marshall Gittler, head of investment research at BDSwiss
Group, noted speculators had already built up record levels of
long positions in the euro which could work to limit further
gains.
"A truly crowded trade that will take more news to push
higher," he argued.
The dollar did steady a little on the yen at 105.47 JPY= ,
after dropping 1.1% on Friday before finding support in the
105.10/20 zone.
In commodity markets, the drop in the dollar helped gold
bounce to $1,974 an ounce XAU= . GOL/
Oil prices steadied, having dipped on Friday after Hurricane
Laura passed the heart of the U.S. oil industry without causing
any widespread damage. O/R
Brent crude LCOc1 futures rose 15 cents to $45.96 a
barrel, while U.S. crude CLc1 gained 6 cents to $43.03.

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(Editing by Shri Navaratnam)