GLOBAL MARKETS-Asian shares, currencies fall on Fed tapering worries

Mon Nov 11, 2013 1:21am EST

* U.S. adds 204,000 jobs in Oct, sharply above forecast

* China's Oct factory output, CPI rise

* Dollar gains against euro and yen

* Indonesian rupiah, Thai baht, Indian rupee fall

* Tokyo's Nikkei jumps 1.3 pct

By Dominic Lau

TOKYO, Nov 11 (Reuters) - Asian shares fell to a four-week low on Monday as a surprise surge in U.S. jobs growth heightened worries the Federal Reserve will start reducing stimulus as soon as next month -- boosting the dollar against the euro, yen and emerging currencies.

MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.5 percent, hitting its lowest since Oct. 11 and extending Friday's 1 percent drop.

Jakarta shares fell 0.8 percent, Thai stocks lost 1.5 percent and the Manila bourse dropped 1.7 percent.

"Stronger than expected U.S. labour market report will increase fears of portfolio capital outflow from emerging markets, and will weigh on current account deficit currencies in particular," Credit Agricole CIB said in a client note.

Emerging Asian currencies came under pressure, with the Indonesian rupiah down 1 percent to 11,551 per dollar, hitting a one-month low, and Thai baht off 0.9 percent to 31.66 to a seven-week trough.

The Indian rupee was down 1.3 percent at 63.281 per dollar while the Philippine peso eased 0.5 percent to 43.38 against the greenback, a one-month low.

Major European indexes were expected to open flat to modestly higher.

U.S. employers took on 204,000 new employees last month, almost twice the number forecast by analysts and defying expectations that the partial U.S. government shutdown would hamper job growth.

The strong data raised the prospect the Federal Reserve may soon decide to start winding down its $85 billion-a-month bond-buying programme.

Fed Chairman Ben Bernanke and two other top policymakers suggested continued support for the U.S. central bank's massive stimulus campaign, however.

A hedge fund manager said it was unlikely that the Fed will start reducing stimulus by year-end.

"If people get concerned about rates in the U.S. moving higher and QE ending sooner, obviously that will have an impact. But I don't think it's going to happen anytime soon," he said.

"I just think they wouldn't do anything before the end of the year because of the impact on sentiment and consumption. I think it's too early to talk about it."

The Chinese CSI300 Index rose 0.4 percent in a choppy session after touching a 2-1/2 month low, with investors awaiting the end of a four-day closed-door policy meeting of the Chinese Communist Party on Tuesday that will set the economic agenda for the next decade.

China's annual inflation climbed to an eight-month high in October, fuelling market worries about policy tightening as factory output and investment data pointed to signs of stabilisation in the world's second-largest economy.

DOLLAR UP, NIKKEI ADVANCES

The dollar was steady at 99.005 yen, not far from a seven-week high of 99.41 yen reached last Thursday, and up 0.1 percent at $1.33585 to the euro, having gained 0.4 percent on Friday.

Against a basket of major currencies, the dollar stood at 81.258, within striking distance to a two-month high of 81.482 touched on Friday.

As the yen weakened, Japan's Nikkei benchmark climbed 1.3 percent in relatively light trade after losing 0.8 percent last week.

U.S. S&P E-mini futures were little changed in Asian trade after the Standard & Poor's 500 index advanced 1.3 percent on Friday.

U.S. Treasury futures added 2 ticks after the 10-year U.S. Treasury yield rose as much as 15 basis points to a four-week high of 2.763 percent on Friday.

Gold slipped 0.3 percent to about $1,284.5 an ounce, adding to Friday's 1.5 percent decline and languishing near a three-week low on worries that the Fed will soon remove its support for the economy.

Brent crude prices rose 0.3 percent to around $105.4 a barrel, building on Friday's 1.6 percent rise, which broke a three-day run of losses and rebounded from a four-month trough.

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