GLOBAL MARKETS-US stock futures rise on Yellen, but fiscal deadlock weighs
TOKYO, Oct 9 (Reuters) - U.S. stock futures rebounded from a one-month low on Wednesday on news that U.S. President Barack Obama will nominate Federal Reserve Vice Chairwoman Janet Yellen, seen as a proponent of dovish policy, as the next head of the U.S. central bank.
Still, global shares are likely to stay under pressure as investors start to take precautions to protect themselves against the possibility the U.S. government may default on its debt later this month.
The yield on one-month U.S. government debt hit a 5-year high on Tuesday as investors shunned U.S. debt maturing right after the Oct. 17 deadline to raise the debt ceiling.
U.S. stock futures rose 0.3 percent in early Asian trade to 1,655 . On Tuesday the cash S&P 500 index fell 1.2 percent to hit a one-month low on concerns about the deadlock over the U.S. budget and debt ceiling.
The euro also gained 0.2 percent against the dollar to $1.3600, as Yellen is expected to be cautious about lifting stimulus.
"I wonder why Obama brought up the Fed's nomination at this juncture, when the Congress is in a mess. It's as if he wanted something to support share prices," said Tohru Yamamoto, chief fixed income strategist at Daiwa Securities.
While the nomination of Yellen could be positive for asset prices in the long-term, the market is likely to be overwhelmed in the near-term by concerns over the standoff in Washington.
"The market focus has been on the budget side ... It's not going to have a significant impact on the market," said Tohru Sasaki, head of rates and FX research at JPMorgan.
Overnight there was no tangible progress on the fiscal confrontation between Democrats and Republicans.
Obama turned up the political pressure on Republicans, saying he would be willing to negotiate on budget issues only after they agree to re-open the federal government and raise the debt limit with no conditions.
Republican Speaker of the House of Representatives John Boehner, who had a phone conversation with Obama, said he was disappointed by the president's approach.