* Asia shares index hit 6-1/2 yr high but unable to hold
* Spreadbetters expect slightly lower open for Europe
* German CPI eyed for euro cues
By Shinichi Saoshiro
TOKYO, Aug 28 Asian shares held steady after
pulling back from a 6-1/2 year high as the recent rally in risk
assets petered out for now, while the euro clung to modest gains
after rebounding from 13-month lows.
The Australian dollar rose to a three-week high versus the
U.S. dollar after second quarter business investment data beat
In line with Asia's subdued performance, spreadbetters
expected a slightly lower start for European shares, forecasting
Britain's FTSE to open as much as 0.1 percent lower,
Germany's DAX down 0.15 percent and France's CAX
0.1 percent lower.
"European equities are set to edge lower as concern brews
that traders have gotten ahead of the curve on ECB stimulus and
that fighting in Ukraine flares up again," Jonathan Sudaria, a
dealer at Capital Spreads, said in a note to clients.
MSCI's broadest index of Asia-Pacific shares outside Japan
stood little changed at 514.07 after rising to
515.13, its highest since early 2008.
Tokyo's Nikkei shed 0.6 percent, weighed by gains in
The S&P 500 posted another record closing high
overnight, although a lack of fresh bullish incentives kept
gains small on Wall Street, only providing a short-lived lift
for Asian shares earlier on Thursday.
The euro received some reprieve after three sessions of
losses as feverish speculation of an imminent round of easing by
the European Central Bank was tempered for now.
Sources told Reuters on Wednesday that the ECB is unlikely
to take new policy action next week unless inflation figures on
Friday show the euro zone sinking significantly towards
The euro gained 0.2 percent to $1.3217, creeping up
from a one-year low of $1.3152 plumbed on Wednesday.
The markets looked to the German inflation data due later in
the session, which foreshadow the closely watched euro zone
inflation figures due Friday, to see whether the euro can extend
its rebound or continue probing fresh lows.
"If the German CPI underlines strengthening deflation, it
will fuel caution towards the euro zone consumer data due
tomorrow and add selling pressure on the euro," said Junichi
Ishikawa, a market strategist at IG Securities in Tokyo.
Euro zone inflation figures on Friday are expected to show
the annual rate dipping to 0.3 percent in August from 0.4
The dollar slipped 0.1 percent to 103.74 yen, having
pulled back from a seven-month peak of 104.49 struck at the
start of the week.
The greenback has so far failed to build a steady foothold
above 104 yen, partly due to persistently low U.S. yields.
U.S. Treasuries rallied overnight, driving yields lower, as
European government bond yields continued to probe record lows
and month-end buying helped send 30-year Treasury yields to
their lowest levels in over a year.
The Australian dollar gained in response to
stronger-than-expected second quarter business investment which
leant hope the economy could weather an ongoing pullback in the
once-booming mining sector.
The Aussie rose about a quarter of a cent to an intraday
peak of $0.9373, its highest in three weeks.
In commodities, U.S. crude oil dipped after choppy trading
overnight following a report that showed declining U.S. gasoline
U.S. crude dipped 33 cents to $93.55 a barrel with
the market looking to U.S. economic data due later in the
session to gauge the outlook for demand from the world's largest
Spot gold edged up as a lower dollar and lingering
geopolitical tensions helped offset selling pressure from
bullish U.S. equities.
Spot gold gained 0.3 percent to $1,286.36 an ounce.
(Additional reporting by Wayne Cole in Sydney; Editing by Eric