Sterling soars on Scottish vote, Asian shares rise

TOKYO (Reuters) - The British pound rose sharply after the Scottish independence vote indicated Scotland would remain in the United Kingdom, while Wall Street's overnight gains and Alibaba Group's red-hot initial public offering underpinned Asian shares.

Sterling was last up 0.6 percent at $1.6489 after rising as high as $1.6525, a marked turnaround from a 10-month low of $1.6051 touched just last week. Investors awaited final results, with figures so far indicating a solid win for the "No" camp.

"The results appear to be leaning toward 'No,' and this indirectly lifted the dollar against the yen," said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.

Sterling's rise against the yen took the Japanese currency down more than two full yen to buy 180.66 yen , its lowest since late 2008.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> added 0.2 percent, supported by cheer on Wall Street, where both the benchmark S&P 500 <.SPX> and the Dow Jones industrial average <.DJI> set intraday record highs. But the Asian index was still on track for a weekly loss of about 1.4 percent.

Sentiment was also underpinned by news that Alibaba Group Holding priced its IPO at $68 a share, the top end of the expected range, raising $21.8 billion on Thursday in one of the largest-ever stock offerings.

Japan's Nikkei stock average <.N225> was up 1.6 percent after earlier touching a seven-year high, getting a tailwind from a weaker currency as the dollar pushed to a new six-year high of 109.46 yen . It was last up 0.4 percent at 109.14 yen.

The Nikkei also got a lift after Japanese Prime Minister Shinzo Abe said he aims to carry out as soon as possible reform of the country's $1.2 trillion public fund, the Government Pension Investment Fund (GPIF), in a reshuffle seen as good for equities.

"It's mainly short-term hedge funds chasing the market higher today by buying futures and index-heavy weight stocks," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

The dollar index <.DXY>, which tracks the U.S. unit against a basket of six major peers, stood at 84.272, edging down about 0.1 percent on the day after it climbed as high as 84.743 on Thursday, its strongest level in more than four years.

The euro steadied at $1.2923 after refreshing a 14-month low on Thursday, when it fell as low as $1.2834.

Risk sentiment was tempered by geopolitical clouds on the horizon. The U.S. Senate on Thursday approved a bill requested by President Barack Obama to arm and train moderate Syrian rebels fighting Islamic State militants, which now goes to Obama to sign into law.

Obama said the strong bipartisan support showed Americans were united in the fight against Islamic State militants.

"The emergence of the militant group ISIS in Syria and Iraq, and recent increase in efforts to fight it, has ushered in a new era of geopolitical risk" in the Middle East and North Africa, strategists at Barclays wrote in a client note.

"We think the stage seems set for a prolonged period of heightened regional uncertainty, with risks potentially spilling over into global oil markets and other economies and financial markets in the region," they said.

Brent crude held below $98 a barrel on Friday, but was set for its first weekly gain in three on the possibility of lower OPEC output. Brent edged down to $97.65 a barrel, while U.S. crude slipped slightly to $92.97.

Spot gold inched lower to $1,224.35 an ounce after touching $1,216.01 in the previous session, its lowest since Jan. 2 on speculation about an earlier-than-expected U.S. interest rate hike.

(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Shri Navaratnam and Eric Meijer)

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