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Gold, copper hit records; silver leaps

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JGB yields strike decade highs

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Global shares hover just below peaks

(Updates prices)

By Tom Westbrook

SINGAPORE, May 20 (Reuters) - Asian shares hit two year

highs while copper and gold struck records on Monday as

investors wagered on interest rate cuts around the corner and

China stepping up efforts to steady its ailing property sector.

Brent crude futures rose to a one-week high of

$84.25 a barrel after a helicopter crash killed Iran's president

and Saudi Arabian state news flagged a health issue for the

king, threatening fresh instability in the Middle East.

Gold climbed more than 1% to $2,449.89 and copper

futures surged nearly 7% in Shanghai to a record 88,940

yuan a tonne and fetched $11,104.50 in London.

ANZ analysts pointed to tight supply and signs of resilient

global growth as helping copper and noted record first-quarter

imports of 566 tonnes of gold into China as supporting prices.

MSCI's broadest index of Asia-Pacific shares outside Japan

was up 0.4%, Japan's Nikkei rose 0.7%

and hit a five-week high and world shares were

within a whisker of last week's record peaks.

S&P 500 futures rose 0.1%, as did FTSE futures

and European futures.

China announced "historic" steps on Friday to stabilise its

property sector, with the central bank facilitating 1 trillion

yuan ($138 billion) in extra funding and local governments set

to buy some apartments. It left benchmark rates on hold, as

expected.

After last week cheering a slowdown in U.S. inflation and

European policymakers' flagging rate cuts as soon as June,

investor focus now turns to policy speeches, meeting minutes, a

central bank decision in New Zealand and Nvidia results.

"The week ahead will pivot on the Fed speakers and (Fed)

minutes in how they paint the picture of policy risks ahead,

with a bias to ease rather than hike essential," said Bob

Savage, BNY Mellon's head of markets strategy and insights.

Two-year U.S. Treasury yields ended last week

four basis points (bps) lower at 4.825% and were steady in Asia

trade. Ten-year U.S. yields were down 8.4 bps last

week to 4.42%.

BIG IN JAPAN

Across the Pacific speculation is growing that Japanese

rates can lift off zero, which is driving government bond yields

there to their highest in more than a decade.

Ten-year yields went up 2.5 bps to 0.975%,

the highest since 2013, though the wide gap to U.S. yields left

the unloved yen little changed.

"Something has to give, and if the Bank of Japan has to

start to increase interest rates, and that means long end yields

will also have to adjust higher as well, and I think we're

starting to see that," said ANZ's head of Asia research Khoon

Goh.

In currency markets the dollar logged its largest weekly

drop on the euro in two-and-a-half months last week, but was

steady in Asia morning trade on Monday.

The euro was a touch stronger at $1.0880 on

Monday. The yen was steady at 155.70 per dollar.

The Australian dollar rose 1.4% last week and held

at $0.6697 on Monday and the New Zealand dollar hovered at

$0.6127. The Reserve Bank of New Zealand sets interest rates on

Wednesday and is expected to leave its main cash rate at 5.5%.

Meeting minutes are due from Australia's central bank and

the Federal Reserve. Flash global PMIs are also out this week.

Elsewhere in commodities unrest in New Caledonia drove up

prices for its major export, nickel, and silver was

chasing gold higher broke above $30.