* Asia shares follow Wall St lower, Nikkei skids 2 pct
* Copper prices melting as Shanghai futures hit lowest since
* Gold jumps to 4-1/2 month high
* Yen edges higher as Australian dollar loses ground
By Wayne Cole
SYDNEY, March 12 Asian stock markets swung lower
on Wednesday as economic uncertainty in China and the United
States combined with political tensions in Ukraine to keep
investors cautious and commodities under a dark cloud.
Copper grabbed the headlines as Shanghai futures
fell 5 percent to their lowest since 2009 amid concerns about
the potential unravelling of loan deals where the industrial
metal has been used as collateral.
Japan's Nikkei retreated 2 percent, continuing the
see-saw pattern of the last couple of months, while Australian
stocks shed 1 percent. MSCI's broadest index of
Asia-Pacific shares outside Japan fell 1
That mirrored a lacklustre performance by Wall Street, where
soft data left investors no wiser on whether the economy's
troubles were merely weather-related or something more
The Dow ended Tuesday down 0.41 percent, while the
S&P 500 lost 0.51 percent.
Lurking in the background was the standoff in Ukraine.
Ukraine's acting president announced the formation of a
volunteer national guard, while ousted leader Viktor Yanukovich
insisted he remained the legitimate leader.
In Asia, investors are hoping Chinese data on industrial
output, retail sales and urban investment due on Thursday might
offer some clarity on where the economy is heading.
In the meantime, caution was the watchword as concerns about
the state of Chinese demand continued to pressure industrial
commodities, particularly copper and iron ore.
Both metals have been used in China as collateral for loans,
leaving traders and steel mills vulnerable to a credit squeeze.
"Copper prices continue to slide on concerns that the
cyclical metal may face tough times as China slows and
rebalances away from investment into consumption," said analysts
from Barclays in a note.
At least one U.S. scrap copper trader has suffered "large"
losses after a buyer in China defaulted on a deal in the past
week, one of the first signs that sinking prices and tightening
credit are taking a toll on the physical market.
NOT SYSTEMIC, YET
"Global risk sentiment has held up well, however, as so far
the market does not seem to identify these risks as systemic,"
The relative calm was clear in the U.S. Treasury market,
where yields on 10-year notes have hovered around 2.77 percent
for the past couple of sessions.
Supporting sentiment was a Reuters report that China's
central bank is prepared to loosen monetary policy if economic
growth slows further by cutting the amount of cash that banks
must keep as reserves.
Citing sources involved in internal policy discussions, the
report said an easing would be triggered if growth slips below
7.5 percent, and would come on top of money market operations
and currency intervention via state banks that traders say has
already loosened monetary conditions overall.
The slide in prices for copper and iron ore undermined
Australia's dollar as the country is a major exporter of both
metals. The currency was down at $0.8952 on Wednesday,
having shed half a U.S. cent overnight.
It was one of the few movers among the major currencies,
which have been trading in tight ranges recently. The dollar
eased a touch on the yen to 102.91 as the Japanese
currency benefited from its traditional status as a safe haven.
The euro edged lower to $1.3855 after officials from
the European Central Bank reminded investors there was still
scope to ease policy if needed.
One beneficiary of global uncertainty has been gold,
which jumped in Asian trade on Wednesday to a 4-1/2 month high
of $1,359.25 an ounce.
Oil prices extended their pullback with Brent crude
off 29 cents to $108.26 a barrel, while U.S. oil lost 55
cents to $99.48.