GLOBAL MARKETS-Asian shares steady before Bernanke testimony, dollar off 3-week low

Wed Jul 17, 2013 2:25am EDT

* Bernanke's testimony starts at 1400 GMT, prepared remarks at 1230 GMT

* Dollar comes off three-week lows vs basket of currencies

* Brent oil prices slip from 3-1/2 month high, copper falls

By Dominic Lau

TOKYO, July 17 (Reuters) - Asian shares steadied on Wednesday ahead of a congressional testimony by Federal Reserve Chairman Ben Bernanke, which could offer clarity on when the U.S. central bank will reduce its stimulus, while the dollar came off a three-week low.

Bernanke will probably seek to use his testimony on Wednesday and Thursday to calm market worries about life without the U.S. central bank's $85 billion a month bond-buying programme.

His comments last week that highly accommodative monetary policy would be needed for the foreseeable future wrongfooted investors, who had bet on the Fed to scale back stimulus as soon as September, sending the dollar sharply lower and global equities higher.

"He probably does not want to knock down share prices. So he may want to avoid being too hawkish," said Koichi Takamatsu, a manager of forex at Nomura Securities in Tokyo.

European stock index futures edged up 0.1 percent, indicating a largely steady open, while S&P 500 index futures were up 0.1 percent.

The dollar added 0.2 percent, though not too far from a three-week low hit on Tuesday.

Traders said preemptive moves to cut long dollar positions allowed for a bounce if Bernanke did not appear to be extremely dovish. Bernanke's prepared remarks for his congressional appearance will be released at 1230 GMT.

"We continue to favour running long dollar positions versus G10 currencies, whose central banks are in easing mode, particularly sterling right now," analysts at BNP Paribas wrote in a note.

A senior Canadian finance official said the G20 meeting in Moscow this weekend is likely to discuss the Fed's plans to reduce its bond purchases but he declined to endorse emerging-market criticism of those plans.

Emerging economies such as South Africa, Indonesia, India, Turkey and Poland are vulnerable to the risk of a sudden stop in investment flows as investors reconsider exposure to markets which have attracted trillions of dollars of cheap money printed by developed world central banks.

UPBEAT EQUITIES

Asian shares, as measured by the MSCI Asia-Pacific ex-Japan index, were up 0.05 percent, with Seoul shares advancing 1.1 percent.

Australian shares dipped 0.1 percent, though global miner BHP Billiton climbed 2.3 percent after it posted a robust 9 percent rise in iron ore output to a record annual 187 million tonnes.

In terms of valuations, Australian equities carry a 12-month forward price-to-earnings ratio of 13.3, more expensive than the MSCI Asian gauge's 11, according to Thomson Reuters Datastream.

U.S. stocks eased overnight, with the S&P 500 snapping an eight-day winning streak after disappointing sales from Coca-Cola.

In the commodity markets, gold dipped 0.1 percent, after gaining 0.8 percent on Tuesday, while copper prices fell 0.5 percent to below $7,000 a tonne, giving up some of the previous session's 1.2 percent gain.

Brent crude prices fell 0.3 percent to below $108 a barrel, retreating from a 3-1/2 month high hit on Tuesday.

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