GLOBAL MARKETS-World shares end bumper year, Japan sees best gains since 1972

    * MSCI world share index holds at 6-year high 
    * Wall Street set for steady start to week 
    * Yen hits fresh five-year lows on dollar and euro 
    * Trading light as year-end approaches 
 
    By Marc Jones 
    LONDON, Dec 30 (Reuters) - World stocks were putting the 
finishing touches to a bumper year on Monday, steady at a 
six-year peak as rising benchmark bond yields and commodity 
prices underscored expectations of firmer global growth in 2014. 
    Wall Street was set for a quiet start to its final full  
session of 2013 - its best year since 1997, with a near 30 
percent gain. 
    After years in which financial markets lurched from the debt 
crisis in Europe to U.S. political deadlock, investors are 
generally becoming more upbeat on the global economic outlook.   
  
    In Europe, Britain's FTSE 100   , Germany's DAX 
   and France's CAC 40    all made minor downward 
adjustments with annual gains running at 14, 26 and 17 percent.  
    Japanese shares    ended 2013 with a flourish, up 0.7 
percent - 56.7 percent for the year - as the yen    skidded 
to a fresh five-year low for a third straight session.     
    Jeremy Whitley, head of European equities at Aberdeen Asset 
Management, said one reason for the market optimism was that 
company earnings should improve next year. 
    "Our belief is that earnings will recover given the 
improving macroeconomic environment as policy remains very 
accommodative," he said, regarding Europe. 
    "However, it is important to be cognisant of the potential 
headwinds, which include the strength of the euro, austerity 
fatigue ... and the need for an overarching banking union to 
provide confidence in the banking system." 
    Thin year-end conditions made for some more lively moves in 
the currency market. The euro vaulted as high as $1.3892    
on Friday before falling back, and on Monday it was last at 
$1.3776 having dived as low as $1.3727 in Asia. 
    Support for the single currency came from comments by 
European Central Bank President Mario Draghi in Germany's Der 
Spiegel that he saw no urgent need to cut interest rates again 
and no signs of deflation.  TOP/CEN     
    "At the moment we see no need for immediate action. We don't 
have Japanese conditions," he said. (http://www.ecb.europa.eu/press/key/date/2013/html/sp131230.en.html) 
     
    WEAK YEN 
    The rouble    fell following a second bombing in 
as many days in the Russian city of Volgograd, though equity 
investors largely shrugged off the unrest.    
    The dollar was steady at 105.20 yen    after reaching a 
peak at 105.415. The yen has posted nine consecutive weeks of 
falls against the dollar, the longest such run since 1974. 
    Like the huge rise in the Nikkei   , which has seen its 
best performance since 1972 this year, it is the aggressive 
policies of Japan's government and its central bank that have 
been driving the plunge in the yen. 
    In another promising sign for the country's economy, the 
Asahi newspaper reported that Japan's most influential business 
lobby has agreed to encourage its members to raise workers' pay 
for the first time in six years.    
    Japan's competitors, however, have been complaining about 
the weak yen. South Korea's deputy finance minister warned on 
Monday the yen was falling too fast, and the head of China's 
National Development and Reform Commission said the impact on 
neighbours needed to be monitored.    
     
    ITALY IN FOCUS 
    Underpinning both the dollar and euro in recent weeks have 
been widening yield premiums over Japanese debt.     
    Yields on the U.S. benchmark 10-year Treasury note have 
climbed to their highest in more than two years at 3.02 percent 
   since the Federal Reserve said on Dec. 18 it would 
start to taper its monetary stimulus. The comparable Japanese 
yield is just 0.735 percent   . 
    Analysts at RBS note that yields on the 30-year Treasury 
bond were approaching an important level at 4.05 percent, which 
marks the top of a bull channel going back two decades. A breach 
there would be viewed as very bearish for bonds.     
    The only new factor for European debt markets on Monday was 
a 5.5 billion euro Italian debt sale. Rome paid 4.11 percent to 
sell its March 2024 benchmark, up slightly from 4.01 percent at 
a similar auction a month ago.     GVD/EUR   
    The sale came as Italy's third-biggest bank, Monte dei 
Paschi di Siena,    was forced to delay a 3 billion euro 
($4.1 billion) share sale because of shareholder opposition.  
    Global growth hopes lifted copper    and aluminium 
   to four- and two-month highs, while safe-haven gold 
   edged down to $1,202 per ounce as it trudged towards its 
biggest annual loss in over three decades, at nearly 30 percent. 
    Brent and U.S. crude oil       were steady at 
$112.17 and $100.23 a barrel respectively. 
 
 (Additional reporting by Wayne Cole in Sydney; Editing by 
Catherine Evans) 
 ((marc.jones@thomsonreuters.com)(+44)(0)(207 542 9033)(Reuters 
Messaging: marc.jones.thomsonreuters.com@reuters.net)) 
  
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Keywords: MARKETS GLOBAL/