GLOBAL MARKETS-Asia shares slip, dollar stays under pressure
* European shares seen higher on output data outlook * New Zealand dollar jumps on RBNZ's hawkish rate outlook * Australian dollar plunges on employment data surprise * Stronger yen, downbeat machinery orders data help sink Nikkei By Lisa Twaronite TOKYO, Sept 12 (Reuters) - Asian shares surrendered earlier gains while the dollar remained under pressure on Thursday, facing growing expectations that the U.S. Federal Reserve's impending stimulus reduction might be smaller than some had believed. The waning likelihood of an immediate U.S. military strike on Syria also continued to undermine the dollar as diplomatic efforts to place Syria's chemical weapons under international control intensified. European stocks are seen edging up, as investors bet euro zone industrial production data due during the session will confirm the region's economic recovery is on track. Financial spreadbetters expect Britain's FTSE 100 to open around 2 points higher, or up 0.03 percent; Germany's DAX to open 23 points higher, or up 0.3 percent; France's CAC 40 to open 7 points higher, or up 0.2 percent. MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.2 percent. A stronger yen and downbeat economic data helped push Japan's Nikkei stock average down 0.3 percent. While the Nikkei is still up nearly 40 percent so far this year, making it the top performer among major developed markets in local currency terms, although some foreign investors remain sceptical on the country's ability to sustain long-term growth. Data released earlier on Thursday showed Japan's core machinery orders were unexpectedly flat in July, a weak spot in a run of strong recent data and a reminder that firms are still not sufficiently confident of the economy's recovery to aggressively increase capital expenditure. The Fed's next move remains a key focus for global markets. The Federal Open Market Committee meets next Tuesday and Wednesday and is widely expected to begin scaling back its $85 billion monthly asset-buying programme. Friday's disappointing U.S. jobs data, though, prompted many to believe the reduction will be modest. "With threats of an immediate U.S. attack on Syria subsiding, market focus is moving to the Fed's meeting. The market's conviction that the Fed will go ahead with reducing stimulus has weakened a little bit after the payroll data last week," said Katsunori Kitakura, associate general manager of market-making at Sumitomo Mitsui Trust Bank in Tokyo. A Reuters survey earlier this week showed most economists see the U.S. central bank trimming its monthly asset purchases by about $10 billion. The dollar index slipped slightly to 81.485, after having fallen below its 200-day moving average on Wednesday, moving away from a seven-week high of 82.671 hit on Sept. 5. The dollar bought 99.48 yen, down about 0.4 percent. It moved away from Wednesday's high of 100.60 yen, which was the highest since July 22, according to Reuters data. The euro was slightly down at $1.3308 after rising as high as $1.3324 on Wednesday, its highest since Aug. 29. Reduced expectations of Fed tapering have eased pressure on emerging market currencies that recently sold off amid fears of capital outflows. That bought some time for the central banks of Indonesia, the Philippines and South Korea, which all have to consider the impact of eventual Fed stimulus reduction. South Korea's central bank kept interest rates unchanged for a fourth consecutive month on Thursday, as expected. Markets like Brazil and India, which must import capital to finance spending, will feel the effects of the reduction more than countries such as Mexico and South Korea, which are less dependent on foreign funds. One regional standout was New Zealand's currency, which jumped to a four-week high of $0.8151 after the Reserve Bank of New Zealand held its benchmark cash rate steady at 2.5 percent as expected. It said it would likely hold interest rates for the rest of the year but that rates would start to rise by mid-2014. "As these are the most hawkish comments that we have heard from a major central bank, investors could start to see the New Zealand dollar in a new light and drive the currency up another 3 to 5 percent," BK Asset Management managing director Kathy Lien said in a note to clients. But the Australia dollar went the other way, after a surprising drop in employment in August pushed the jobless rate up to a four-year high and revived the chance of a cut in interest rates. The Aussie earlier touched a six-month high of $0.9353 before the data, but was last down about 0.8 percent at $0.9251. "It's a bit of tempering of that optimism that emerged about the economic outlook in the last few weeks," Michael Blythe chief economist at Commonwealth Bank, said after the jobless data. On the commodities front, copper slipped 0.3 percent to $7,148.75 a tonne, on subdued interest ahead of next week's Fed decision. An improved outlook for China's economy and reduced risk of a U.S. strike on Syria have helped bring copper prices off the three-year lows plumbed in late June, but supply concerns remain. Gold skidded 0.5 percent to $1,358.06 an ounce, after hitting a low of $1,354.10 - its weakest since August 20 - as a U.S. strike on Syria looked less likely. Oil was slightly higher, with Brent crude adding about 0.1 percent to $111.61. Brent prices spiked above $117 a barrel in late August on the virtual shutdown of Libyan oil output and the prospect of U.S. military action against Syria. Saudi Oil Minister Ali al-Naimi said on Thursday that the global oil market is well balanced and top exporter Saudi Arabia is ready to supply whatever volume of crude is needed to meet demand.