GLOBAL MARKETS-Stronger yen hits Japan shares, lower yields pressure dollar
* Asia shares follow overnight Wall Street slide
* Indian shares, rupee jump on election expectations
* Spreadbetters see European shares open slightly up
* U.S. yields hit 6-months lows, weigh on dollar
By Shinichi Saoshiro
TOKYO, May 16 (Reuters) - Asian shares came under pressure on Friday, with Japanese stocks skidding as the yen rose against the dollar, which has struggled in recent days as U.S. Treasury yields fell.
A second day of losses on Wall Street pulled MSCI's broadest index of Asia-Pacific shares outside Japan down 0.1 percent. The index has gained about 2 percent on the week during which Wall Street climbed to record highs.
Financial spreadbetters predicted a essentially flat to fractionally higher open for European shares, with Britain's FTSE expected to open up to 0.03 percent higher, Germany's DAX to open up 0.04 percent and France's CAC to open 0.2 percent higher.
Tokyo's Nikkei stock average dropped 1.9 percent, dragged lower by the yen's gains against the dollar, which could put pressure on the earnings of Japanese exporters. The Nikkei has shed 1 percent this week.
Indian shares touched a new record high and the rupee strengthened to an 10-month peak against the dollar, boosted by early results in India's election that put the business-friendly opposition on course for an absolute majority.
"With political uncertainty cleared, the rupee's outlook is getting brighter. It will also benefit from more carry-trades," said Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul.
The dollar traded little changed at 101.46 yen, off a two-month low of 101.31 yen hit Thursday on the back of a continued decline in U.S. Treasury yields. The dollar is poised to end the week about 0.25 percent lower versus the Japanese currency.
Benchmark U.S. Treasuries yields fell to six-month lows on Thursday after Greek government bonds weakened and sparked a safety-bid for U.S. debt, even though U.S. economic data pointed to a firming economy.
"U.S. yields may not stabilize until we have consistent improvements in U.S. data, which means that for the time being, the trend in the greenback could still be lower," Kathy Lien, managing director of FX strategy for BK Asset Management, wrote in a note to clients.
The dollar has fared better against the euro, with the common currency poised to lose about 0.3 percent on the week, weighed down by expectations the European Central Bank will ease monetary policy in June.
Weak euro zone GDP and muted inflation data further fuelled easing expectations on Thursday.
The euro traded little-changed at $1.3710 after dropping to a 2-1/2-month low of $1.3648 on Thursday on ECB easing prospects.
In commodities, gold stood little-changed at $1,296.35 an ounce following a fall of almost 1 percent on Thursday after a drop below the $1,300 threshold triggered technical selling. Upbeat U.S. jobless claims data and consumer prices also reduced gold's safe-haven appeal.
Nickel on the London Metal Exchange (LME) rose 0.8 percent to $18,899 a tonne after having slumped more than 6 percent on Thursday. Nickel is still up 35 percent this year.
LME copper also traded flat from the previous session at $6,878.25 a tonne, and down from Wednesday's two-month peak of $6,940 a tonne. Copper was on track for a weekly gain of around 2 percent, its biggest weekly advance in seven weeks.
Copper prices have been underpinned by tight supply and falling stocks in the peak season for demand. However, consumption is set to slow from next month, dragging on copper's price prospects.
U.S. crude futures rose on Friday, heading for their biggest weekly gain in five weeks on the back of a resurgence in Ukraine tensions and upbeat U.S. economic data. U.S. crude for June delivery was up 37 cents at $101.87 a barrel. (Additional reporting by Jongwoo Cheon in Singapore; Editing by Eric Meijer)
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