* Most Asian markets edge down; Nikkei falls on
* European markets seen opening steady
* Euro close to 6-week high vs dollar, 5-year high vs yen
* Three Fed officials comment on stimulus reduction
* China data reassures investors worried about slowdown
* Investors cautious ahead of Fed policy meeting next week
By Lisa Twaronite
TOKYO, Dec 10 Stocks saw their gains unravel in
Asian trade on Tuesday, while tighter money market conditions in
the euro zone helped the euro climb to a five-year peak against
the yen and a six-week high against the dollar.
European shares appeared to be headed for a steady open,
with financial spreadbetters predicting both Germany's DAX
and France's CAC 40 to open flat and Britain's
FTSE 100 to fall as much as 0.1 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan
was down 0.1 percent, though the session's moves
were small as trading was cautious ahead of next week's U.S.
Federal Reserve meeting.
The Nikkei stock average gave up 0.3 percent,
pulling back from a one-week high as investors booked gains
before the year-end, though Japan's benchmark was still on track
for its best yearly performance since 1972.
Signs of improvement in the global economy have provided
fitful support to riskier assets in recent weeks as markets have
been buffeted by uncertainty over the Fed's tapering timeline.
A spate of data released by China late in the session
reassured investors worried that the world's second-largest
economy might be slowing. Industrial output rose 10.0 percent in
November from a year earlier, slightly shy of market
expectations, but retail sales were up a stronger-than-expected
13.7 percent, the National Bureau of Statistics said.
Fixed-asset investment, an important driver of China's
economic activity, climbed 19.9 percent in the first 11 months
from the same period last year, the bureau said.
"It's hard to see this causing any anxiety to the
authorities or causing them to see the need for policy change,"
Tim Condon, economist at ING in Singapore, said about the
"Growth is about where it was the previous month. The
economy is humming along and there is no need for growth
upgrades or growth downgrades," he added.
The euro was up about 0.2 percent at 142.09 yen
after rising as high as 142.19 yen, its highest since October
2008. Against the dollar, the euro rose 0.1 percent to $1.3749
, after rising as high as $1.3768 and moving towards its
two-year peak of $1.3833 set in October.
The dollar inched up slightly to 103.35 yen, not far
from its five-year high of 103.74 yen touched in May.
Almost two-thirds of Japanese firms expect the Bank of Japan
will increase its stimulus in the first six months of 2014, a
Reuters poll showed on Tuesday, keeping pressure on the yen.
"Expectations of further BOJ easing in 2014 appear to be
building, as reflected in recent Japanese yen weakness,"
strategists at UBS wrote in a note.
They said net buying of Japanese equities by UBS clients
rose last month to its highest level since May and that Japan
was the most favoured region among its clients over both the
last four and 12 weeks.
ECB, FED POLICY
The euro was bolstered by rising short-term interest rates
in the euro zone money market as chances of more easing by the
European Central Bank faded, though analysts say the central
bank's operations are likely to avert any credit crunch.
"Tensions in the liquidity market are set to remain until
year-end," strategists at Barclays said in a note to clients.
"But a 'liquidity accident' is unlikely as the full allotment at
the ECB's operations is an important backstop," they added.
ECB Executive Board member Yves Mersch on Monday played down
the prospect of asset purchases, saying such action poses
immense challenges for the central bank.
The Fed is expected to begin tapering its own asset
purchases in March, a Reuters poll showed on Monday, but some
economists now say that it might do so as early as this month or
next. The U.S. central bank will hold its next regular policy
meeting on Dec. 17-18.
Several Fed officials on Monday also lent credence to the
idea that a U.S. stimulus reduction was on the near-term
St. Louis Fed President James Bullard said the Fed could
slightly reduce its monthly bond purchases this month in
reaction to signs of an improved labour market, while Dallas
Federal Reserve Bank President Richard Fisher said tapering
should start next week. Meanwhile, Richmond Fed President
Jeffrey Lacker said further stimulus is unlikely to do much to
help the U.S. economy.
Bullard is a voting member of the policy-setting Federal
Open Market Committee this year. He recently said a strong
payrolls number would raise the chance of tapering in December,
and the latest report released last Friday showed employers
hired more workers than expected in November, driving the
jobless rate to a five-year low of 7.0 percent.
On the commodities front, U.S. crude oil prices rose
0.5 percent to $97.79 per barrel on expectations of a second
weekly drop in U.S. crude inventories.
Spot gold rose to $1,245.70 an ounce, after gaining
over the last two sessions on short-covering, technical-selling
and some fund-buying.
Copper was steady at $7,137.25 a tonne, near a
one-month high as steady consumer buying from China put a floor