REFILE-GLOBAL MARKETS-Asian shares shrug off losses, yen holds gains

Tue Apr 8, 2014 2:44am EDT

(Removes extraneous word in lead, fixes formatting)

* Spreadbetters see flat to lower European open

* Bank of Japan maintains monetary policy as expected

* Nikkei skids 1.4 percent to 2-week closing low

* Rising Ukraine tension keeps risk appetite in check

By Lisa Twaronite

TOKYO, April 8 (Reuters) - Asian stocks shrugged off early losses and rose on Tuesday, helped by Chinese shares rising sharply on stimulus hopes, though Japanese equities slumped as the yen clung to its gains after the Bank of Japan held policy steady.

MSCI's broadest index of Asia-Pacific shares outside Japan added about 0.4 percent. The Shanghai Composite Index was up 1.8 percent.

Financial spreadbetters expected Britain's FTSE 100 to open 16 to 19 points lower, or down 0.3 percent; Germany's DAX to open 7 to 10 points lower, or down 0.1 percent; and France's CAC 40 to open unchanged.

"European equities are set to start flat as traders tread cautiously," Jonathan Sudaria, a dealer at London Capital Group said in a note to clients.

"Whilst the mini tech-wreck in the U.S. has weighed on global markets, European sensibilities hadn't allowed valuations to reach such unfathomable levels so it's fair to assume that traders don't see why there should be a wider sell off," he said.

Wall Street gloom initially cast a shadow over the Asian session. On Monday, the Nasdaq Composite suffered its worst three-session decline since November 2011 as Internet stocks tumbled, while the S&P 500's three-day fall was its steepest since late January.

Rising tensions in Ukraine also tempered investor appetite for risk. Pro-Moscow protesters in eastern Ukraine seized arms in one city and declared a separatist republic in another, moves Kiev described on Monday as part of a Russian-orchestrated plan to justify an invasion.

Japan's Nikkei stock average bucked the regional trend and slumped 1.4 percent to its lowest close in two weeks.

The BOJ kept monetary policy steady on Tuesday and maintained its view the economy is likely to continue recovering moderately, signalling its confidence the country is making steady progress toward meeting the bank's price target. But some investors had hoped Japan's central bank would surprise with an announcement of more purchases of more risk assets such as exchange-traded funds (ETFs).

"I think the BOJ are hedging their view a little bit. There is an element of increased caution," said Hiroshi Shiraishi, senior economist at BNP Paribas Securities in Tokyo.

"We don't rule out the possibility of an increase in risk asset purchases like ETFs, but we are quite sceptical about a big increase in the monetary base target."

Data released shortly before Tokyo markets opened showed some economic resilience, as Japan's current account balance returned to a surplus in February for the first time in five months on stronger exports to Asia and rising income from overseas investments.

Against the yen, the dollar fell about 0.2 percent to 102.87 yen, well off its 2-1/2 month high of 104.13 yen hit on Friday.

The euro also bumped lower against its Japanese counterpart, down about 0.2 percent to 141.38 yen, though it held above Monday's more than one-week low of 141.12 yen.

Against the dollar, the common currency was flat on the day at $1.3744, having pushed off Friday's five-week nadir of $1.3672 to Monday's high of $1.3748.

In commodity markets, gold was trading around two-week highs, up about 0.9 percent from the previous session at $1,308.90 an ounce.

U.S. crude for May gained about 0.6 percent to $101.03 a barrel, pushed up by the renewed tensions over Ukraine, a major supply route for Russian gas to Europe. But the rise was capped by expectations of a U.S. crude oil stock build-up.

May Brent crude rose about 0.3 percent to $106.09 a barrel. (Additional reporting by Stanley White; Editing by Eric Meijer)

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