* Investors looks for more clarity on ECB, Fed policy
* Fall in China steel prices, tighter lending rekindle
* European bourses seen posting small gains
* Asia ex-Japan MSCI down 0.3 pct, Nikkei hits 1-month low
By Hideyuki Sano
TOKYO, May 19 Asian share prices eased on Monday
while European shares were called slightly higher as investors
waited to see if the world's major central banks will continue
to keep monetary policy easy and in some cases loosen further.
Concerns about slower growth in China undermined some
markets in Asia, with mainland Chinese shares falling
more than 1 percent to two-month lows on news that Beijing is
tightening its grip on interbank lending to defuse risks in the
shadow banking system.
Spreadbetters see European shares eking out small gains,
with France's CAC seen leading the gains with 0.2
percent rise and Germany's DAX expected to be gaining
less than 0.1 percent.
Japan's Nikkei average succumbed to the regional
weakness after initial gains, hitting one-month lows.
MSCI's broadest index of Asia-Pacific shares outside Japan
ticked down 0.3 percent, led by Australian
shares falling 1.2 percent.
Indian shares extended their gains following an
election victory last week by the opposition Bharatiya Janata
Party and its allies, seen as more business-friendly than the
outgoing Congress party.
"I think (the market) will remain choppy until we get some
clear indications or more comfort around some of these high
multiples. The key thing for a lot of investors here are these
prices are a bit rich - is it being justified by earnings?" said
John Milroy, investment adviser at Macquarie Bank.
Given some of the uncertainty about the global economic
outlook, monetary support was a key theme for investors, with
the European Central Bank taking centre stage.
Five senior sources have told Reuters that the European
Central Bank is preparing a package of policy options for its
early June meeting, including cuts in all its interest rates and
targeted measures aimed at boosting lending to small- and
A few ECB policymakers will speak publicly later in the day,
including Governing Council member Jens Weidmann, Executive
Board member Yves Mersch.
Expectations of ECB action depressed bond yields not only in
Europe but also in the United States last week.
Strong U.S. housing data released on Friday helped U.S.
Treasuries yield bounce back from six-month lows, with the
10-year yield now at 2.517 percent, versus a
six-month low of 2.473 percent.
Another focus, given a light data calendar in the next
couple of days, is on the minutes of the Fed's policy meeting
due on Wednesday, in which analysts expect to find a discussion
on the Fed's exit strategy from super-easy policy.
"The positive U.S. housing data was reassuring. But a lot of
investors are likely to take a wait-and-see stance given the
lack of a strong catalyst for buying," said Tsuyoshi Shimizu,
chief strategist at Mizuho Asset Management.
In the currency market, the euro remained under pressure on
expectation of stimulus by the ECB following soft euro zone
growth data published last week.
The euro traded little changed at $1.3705, not far
from 2 1/2-mont low of $1.3648 touched on Thursday.
Against the yen, it changed hands at 139.18 yen,
near three-month low of 138.77 yen hit on Friday.
The yen also had the upper hand on the dollar, after U.S.
bond yields plunged last week, undermining yield attraction of
The dollar traded at 101.40 yen, near the low end of
its narrow trading band between 101.20 and 104.13 in the past
Brent crude oil rose 0.3 percent to $110.12 per
barrel, while NYMEX light crude advanced 0.2 percent to
Copper, a commodity sensitive to Chinese demand, hit a
11-week high, somewhat softening the blow from a fall in iron
ore prices due to a weaker Chinese steel market.
(Additional reporting by Thuy Ong in Sydney; Editing by Shri
Navaratnam & Kim Coghill)