* Spreadbetters predict narrow moves at European open
* S&P 500's third record close in 4 sessions supports
* Japan's Nikkei erases early gains in choppy trading
* Dollar edges down, pressured by low U.S. yields
By Lisa Twaronite
TOKYO, May 30 Asian shares saw their gains
unravel on Friday after rising on another record Wall Street
close, while the dollar groaned under the pressure of slumping
A similar session is expected in Europe, where shares are
expected to tread water around recent highs. Financial
spreadbetters predicted Britain's FTSE 100 to open flat;
Germany's DAX to gain 5 to 6 points, or as much as 0.06
percent; and France's CAC 40 to fall 2 to 3 points, or
as much as 0.07 percent.
"Trading has been a bit muted this week as traders are
sitting on their hands in anticipation of the expected
announcement of monetary easing from the ECB next week," said
Jasper Lawler, market analyst at CMC Markets, in a note to
Reuters reported earlier this month that the ECB is
preparing a package of policy options for its June 5 meeting
that includes cuts in all its interest rates.
MSCI's broadest index of Asia-Pacific shares outside Japan
edged down about 0.2 percent, but was still on
track for a solid monthly rise, after it touched an intraday
one-year high for the sixth time in the last seven sessions.
Japan's Nikkei stock average edged down 0.3 percent
in choppy trading, breaking its longest winning streak since
December, as investors booked profits after six sessions of
gains. It still marked a weekly increase, and its first monthly
gain in five months, supported by strong consumer price data.
Japan's core consumer prices jumped 3.2 percent in April
from a year earlier, the fastest gain since February 1991 after
a hike to Japan's national sales tax led to price
"The figures suggest that we can expect rents to rise and
companies' sales to increase, which will lead to increased
capital spending," said Shigemitsu Tsuruta, senior strategist at
SMBC Friend Securities. "Such expectations are lifting the mood,
and we are bullish about the Japanese market in the second half
But Japan's economic picture is not entirely rosy, as
separate data showed household spending falling in April at its
fastest rate in three years and industrial production slowing
more than expected.
Data released overnight showed U.S. first-quarter gross
domestic product fell a steeper-than-forecast 1 percent, but the
drop was not enough to quash expectations of a second-quarter
recovery. A decline in weekly jobless claims underscored a
strengthening labour market.
The S&P 500 index posted its third record closing
high in four sessions, as investors shrugged off the first
quarterly contraction of the U.S. economy in three years and
focused on the signs of a strengthening labour market.
The yield on benchmark 10-year Treasuries last
traded at 2.466 percent, up from the U.S. close of 2.447
percent. But it was still not far from its lowest levels since
last June, touched this week, as markets became convinced that
the Federal Reserve won't begin raising rates any time soon.
"Ten-year yields in the U.S., Europe and Japan are near
cyclical lows, on growing evidence of central banks' willingness
to keep rates low for long, led by a dovish Fed and speculation
on ECB easing next week," strategists at Barclays said in a note
The euro was steady at $1.3599 but not far from
Thursday's three-month low of $1.3586.
The dollar index, which tracks the greenback against a
basket of six major rivals, eased slightly to 80.477.
The yen was slightly higher against the dollar, which bought
101.58, down about 0.2 percent.
In commodities trading, spot gold was steady after a
three-session losing streak at $1,255.66 an ounce, but was still
headed for its biggest weekly drop in two months against the
backdrop of an improving U.S. economy.
Copper slipped 0.3 percent to $6,863.25 a tonne, but
was still poised for its biggest monthly rise of the year due to
peak seasonal demand from China.
U.S. crude fell 0.1 percent to $103.46 a barrel but
was still on course for its first monthly rise in three months,
as tension in Ukraine and Libya supported futures throughout
this month. Brent crude inched up about 0.1 percent to
$110.02 a barrel.
(Additional reporting by Ayai Tomisawa in Tokyo; Editing by
Chris Gallagher & Shri Navaratnam)