* MSCI Asia ex-Japan down 0.8 pct, Nikkei scales 5-1/2-year
* Yen hits fresh 4-1/2-year low vs dollar after G7 avoids
* Strong dollar weighs on dollar-based commodities prices
* European shares likely mixed
By Chikako Mogi
TOKYO, May 13 Oil and gold prices fell on Monday
as the dollar strengthened, weighing on Asian shares, but
Japanese equities outperformed on the back of the yen's slide to
a fresh 4-1/2-year low against the U.S. currency.
European stock markets are seen narrowly mixed after the
pan-European FTSEurofirst 300 index closed at a
five-year high on Friday, with financial spreadbetters
predicting London's FTSE 100, Paris's CAC-40 and
Frankfurt's DAX would open between a 0.2 percent rise
and a 0.1 percent drop.
U.S. stock futures were down 0.3 percent, pointing to
a weak Wall Street open, after the Dow Jones industrial average
and the Standard & Poor's 500 Index ended at
record highs on Friday.
"A strength in the dollar is weighing on commodities across
the board," said Ben Le Brun, analyst at OptionsXpress in
Sydney. "For oil, worries of ample supplies is putting pressure.
We have unprecedented levels of stockpiles in the United States,
with uncertainty surrounding economic growth."
U.S. crude futures slipped 0.8 percent to $95.23 a
barrel and Brent dropped 0.7 percent to $103.16.
The dollar's strong performance also took the shine off
gold, which typically serves as an alternative to the U.S.
currency. Spot gold fell as much as 1.5 percent to a
session low of $1,426.40 an ounce.
Investors were cautious ahead of China's data. China's
industrial output in April grew 9.3 percent from a year earlier
and its fixed-asset investment grew 20.6 percent from a year
ago, both slightly below expectations. Retail sales in April
rose 12.8 percent from a year earlier, matching forecasts.
The yen slid to a fresh 4-1/2-year low against the dollar of
102.15 yen in Asia on Monday morning, having earlier hit
its highest point since January 2010 against the euro at 132.385
. The yen last traded at 101.70 against the dollar.
The drop in commodities prices weighed on the Australian
dollar, which traded around $0.9987 after hitting an
11-month low of $0.9961 on Friday.
The dollar was also underpinned against the yen after Japan
avoided criticism from its peers for pursuing bold reflationary
policies which have resulted in a steady decline in the Japanese
currency. A weaker yen improves earnings prospects for exporters
and underpins the export-reliant Japanese economy.
Group of Seven finance officials agreed on Saturday to
redouble efforts to deal with failing banks and gave a green
light to Japan's drive to galvanise its economy.
Having urged Tokyo for years to do something to revive its
economy, other world powers are not in a position to complain
now that it is doing so. Also, the Federal Reserve and Bank of
England have printed money in the way the Bank of Japan is now.
"If international peers criticise the yen's weakness,
investors who are on the nervous side could stop chasing the
market higher. Now, such concerns are receding," said Kenichi
Hirano, a strategist at Tachibana Securities.
The Nikkei stock average scaled a fresh peak since
January 2008 of 14,849.01, rising as much as 1.7 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan
shed 0.8 percent. Hong Kong shares led
the decline with a 1 percent drop as Ping An Insurance fell
sharply after a three-month ban was imposed on its brokerage
unit for helping list a fraudulent Chinese company.
Australian shares were down 0.3 percent after
closing at a five-year high on Friday, while South Korean shares
held in a tight range, capped by the yen's weakness
which erodes the competitiveness of Korean exporters.
U.S. labour market data has pointed to a steady recovery
trend in the world's largest economy, boosting the dollar and
fuelling speculation that the Federal Reserve could scale back
its aggressive monetary stimulus aimed at supporting growth.
Investors were keeping an eye on the U.S. retail sales due
later on Monday.
"U.S. retail sales ... is always going to be important as it
highlights the health of the consumer and the potential to feed
into expectations of inflation and also potential job creation,"
Chris Weston, chief market strategist at IG markets, said in a
note to clients.
U.S. Treasuries extended losses in Asia, with benchmark
10-year yields rising to 1.93 percent from around
1.895 percent on Friday.
Japanese government bond prices tumbled, hurt by the
Nikkei's rally and also tracking U.S. bonds lower, with the
10-year JGB yield hitting a three-month high of
0.750 percent and benchmark JGB futures shedding a full
point to their lowest in a year.
Elsewhere, removing a potential source of political
instability in the Asian region, Pakistan's Nawaz Sharif,
toppled in a 1999 military coup, has made a comeback over the
weekend election, eyeing to form a government to implement
reforms needed to rescue the fragile economy.