* MSCI Asia ex-Japan slips, Nikkei falls as yen weakness
* Sterling under pressure, euro steadies
* U.S. crude, Shanghai copper cling to gains, gold struggles
* European shares likely decline
By Chikako Mogi
TOKYO, March 13 Asian shares fell on Wednesday
on investor concerns that the recent rally in global equities
was running out of steam, while sterling remained vulnerable
after weak UK data fed fears of a triple-dip recession.
Sentiment toward riskier assets was not completely soured,
however, with U.S. crude futures and Shanghai copper clinging on
to gains and gold little changed.
"Asian markets have given up further ground today as a lack
of positive drivers to keep the risk rally going has encouraged
investors to lock in recent gains. Price action in equities
seems to have plateaued after weeks of a relentless rally,"
said Stan Shamu, market strategist at IG Markets.
The bearish tone was expected to spill over to European
markets, with financial spreadbetters predicting London's FTSE
100, Paris's CAC-40 and Frankfurt's DAX
to open down as much as 0.5 percent.
U.S. stock futures were down 0.1 percent, also
pointing to a soft Wall Street open, after the Dow Jones
Industrial Average marked another record close on
Tuesday, its eighth straight day of rises and pushing it higher
into overbought territory.
The MSCI's broadest index of Asia-Pacific shares outside
Japan fell 0.5 percent. South Korean shares
bucked the regional downtrend, edging up 0.2 percent.
"We are still in the scare framework, people are still
scared of risk," said Adrian Foster, head of financial markets
research for Asia-Pacific at Rabobank International in Hong
This was despite the generous global liquidity still in
place even when the risks that prompted central banks into
accommodative stances have subsided, Foster said, with Europe
stabilising and the United States skirting around its budget
problems, improving growth prospects and supporting asset prices
Michael Gavin, head of asset allocation at Barclays Capital
in New York, suggests the return of the VIX volatility index
to levels seen before the global financial crisis may
indicate a "new normal" extended period of low volatility,
buttressed by activist central banks ready to restore calm when
"Of course, this whole context could change if some risk
materialises that cannot be contained by activist central banks.
But the main risks that have preoccupied investors in the past
several years seem unlikely to return to such menacing
proportions," Gavin said in a research.
China shares headed for a fifth-straight loss on
Wednesday, hurting Hong Kong stocks, with the mainland
financial and property sectors hit by fears of tighter
regulations to curb speculative betting on property.
But analysts say China would be careful not to entirely kill
the property boom.
"Property regulation is a near-term concern, but the
government is trying to avoid a too extreme situation of an
overheating or a collapse of the property sector. The government
is adjusting to contain it in a certain range," Yiping Huang,
chief economist for Asia at Barclays Capital in Hong Kong.
STERLING UNDER PRESSURE
As the yen's weakness paused, Japan's Nikkei stock average
fell 0.5 percent, after snapping an 8-day winning streak
which took the index up to a 4-1/2-year high on Tuesday.
Japan's approaching fiscal year-end on March 31 was also
prompting investors to sell to adjust their positions.
The dollar slipped 0.4 percent to 95.67 yen, off
Tuesday's high of 96.71 yen, its peak since August 2009.
The euro fell 0.3 percent to 124.74 yen, after
reaching a one-month high of 126.03 on Tuesday. Expectations for
much bolder monetary easing from the Bank of Japan when a new
leadership takes over next week have pressured the yen.
Sterling traded up 0.2 percent to $1.4938, after falling to
its lowest since late June 2010 on Tuesday after data showed a
surprise fall in British industrial output in January, pushing
the pound down to $1.4832.
Against the Australian dollar, the pound skidded towards
A$1.4370 on Tuesday, lows not seen since 1985, but
was up at A$1.4489 on Wednesday.
"Sterling's weakness on the foreign exchanges remains
intact as an absence of fresh initiatives from the Bank of
England, and the lack of room to ease fiscal policy, leave much
onus on a weaker pound to help stimulate growth," ANZ said in a
The euro was steady around $1.3041, with investors
watching bond sales from highly-indebted euro zone countries to
gauge the degree of anxiety. Italy will offer three-year and
15-year bonds on Wednesday, while Spain plans to sell bonds due
2029, 2040 and 2041 at a special, off-calendar auction on
Crude oil rose 0.2 percent to $92.71 a barrel but
Brent fell 0.2 percent to $109.42.
London copper steadied around $7,832.75 a tonne
while Shanghai copper rose to a 1-1/2-week high 57,160
yuan ($9,200) a tonne.
Spot gold was nearly unchanged at $1,591.46 an ounce.