Asian shares inch up; focus on central banks, Greece

Asian shares scaled seven-year highs following stellar earnings from a few US hi-tech giants, but investors were cautious ahead of central bank meetings this week in the US and Japan and on deadlock in creditors' talks with Greece.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 percent while Japan's Nikkei was flat.

Red-hot mainland Chinese shares soared, with Shanghai composite index rising 2.1 percent to seven-year highs on hopes of more monetary stimulus and launch of infrastructure projects linked to China's "Modern Silk Road" plan.

On Friday, shares in Amazon.com Inc and Microsoft both jumped over 10 percent on strong revenues, boosting the Nasdaq Composite index to a record high.

The MSCI All-Country World Index also hit a lifetime high on Friday.

The bull run's dependence on low interest rates and strong central bank, however, has made investors cautious as the Federal Reserve is expected to raise US interest rates from around zero in coming months.

"Looking at share rallies around the world, I feel the market is becoming a bit complacent about risks. There could be a moment when investors feel fear in the next couple of weeks. The Fed's policy could be a trigger," said Soichiro Monji, chief strategist at Daiwa SB Investments.

Still, few expect the Fed to use its two-day meeting starting on Tuesday to hint at a move in June following soft US business spending data published on Friday.

The soft US data also helped to keep the dollar near a three-week low against its index basket of currencies.

The dollar index stood at 96.913 on Monday, having hit a three-week low of 96.755 on Friday.

Against the yen, it eased slightly to 118.86 yen, near its low so far this month of 118.525 touched a week ago.

Speculators are cutting yen short positions, unwinding bets that the Bank of Japan may surprise the markets by further easing monetary policy on Thursday.

The euro stood at USD 1.0865, near a three-week high of USD 1.0900 on Friday, but the common currency was hampered by growing uncertainty over the likely outcome of Greece's negotiations with creditors.

After no deal was reached between Greece and euro zone finance ministers in their meeting on Friday, German Finance Minister Wolfgang Schaeuble hinted on Saturday that Berlin was preparing for a possible Greek default.

"The bailout talk for Greece is coming to a climax... Proposals from Greece do not include important issues such as pension cuts and labour market reforms and are not something the creditors will be able to stomach," said Koji Fukaya, CEO of FPG Securities.

Although the Greek government managed to get municipalities to lend cash in a last-ditch effort, it is seen running out of cash within weeks.

The head of Germany's Bundesbank said on Saturday he had misgivings about granting emergency funding to Greece as the liquidity situation at the country's banks has not improved.

Oil prices held firm as fighting in Yemen helped to boost Brent crude oil prices to a 4 1/2-month high of USD 65.80 per barrel on Friday. They last stood at USD 65.30.