* MSCI Asia ex-Japan falls but Nikkei hits 2-month high on
* Yen hits 7-month low vs dollar, briefly hits 6-month low
* European officials keep Greece waiting on bailout deal,
* Oil rebounds on absence of Gaza ceasefire despite hopes
* European shares likely inch down
By Chikako Mogi
TOKYO, Nov 21 The euro skidded on Wednesday and
Asian shares fell after European officials failed to reach a
deal on another bailout for Greece, a day after Federal Reserve
Chairman Ben Bernanke highlighted the dangers of a U.S. fiscal
U.S. stock futures eased 0.4 percent, pointing to a
weak Wall Street open.
Financial spreadbetters predict London's FTSE 100,
Paris's CAC-40 and Frankfurt's DAX would open
down as much as 0.2 percent, following weakness in Asia.
The euro slumped 0.5 percent to $1.2752, extending
losses and retreating from Tuesday's two-week high of $1.28295.
The euro's decline lifted the dollar up 0.3 percent against
a basket of key currencies and weighed on commodities
such as gold, which eased 0.3 percent to $1,722.70 an
Euro zone finance ministers and Greece's international
lenders will gather again on Monday. Their meeting in Brussels
ended on Wednesday without an agreement on the next tranche of
loans to Greece, as they haggled over myriad options on how to
bring the country's debt down to a sustainable level, without
which emergency aid cannot be disbursed to Athens.
"The euro is being sold because markets had believed the
ministers would agree on aid for Greece at today's meeting,"
said Yuji Saito, director of foreign exchange at Credit Agricole
"Instead, a settlement is postoned, highlighting the
difficulty of getting consensus on the debt crisis. But I feel
this is a typical European political show and an agreement will
The bearish news from Europe dragged down Asian shares,
whose two-day rise had already been stalled after Bernanke on
Tuesday repeated a warning that failure to avoid the $600
billion "fiscal cliff" in expiring tax cuts and government
spending reductions could lead to recession in the United
The Fed chief said worries over how budget negotiations will
be resolved were already damaging growth.
Concerns about the United States failing to raise its debt
ceiling rattled financial markets in August 2011 and prompted
Standard & Poor's to cut the top-notch U.S. government bond
rating for the first time ever.
"The price action suggests market participants are unclear
of what to make of recent developments and therefore this
warrants some caution," said Stan Shamu, strategist at IG
But Hirokazu Yuihama, a senior strategist at Daiwa
Securities, said that for all the concerns over the fiscal
cliff, most of the market expected the U.S. Congress and White
House to reach a compromise to avert the crisis.
MSCI's broadest index of Asia-Pacific shares outside Japan
slipped 0.2 percent. Hong Kong shares
bucked the falling trend but pared earlier gains to rise 0.5
percent while Shanghai shares inched up 0.3 percent.
Japan's Nikkei stock average closed up 0.9 percent
at a two month-high as exporters were buoyed by a weaker yen.
The yen has come under pressure on expectations that a
general election on Dec. 16 will result in victory for an
opposition leader who wants the Bank of Japan to aggressively
ease monetary policy to stem the economy from further
MACRO DATA EYED
Daiwa's Yuihama said concerns over third-quarter earnings
have subsided as most Asian companies had already reported
"This has prompted investors to turn to economic
fundamentals. Signs of recovery in the U.S. and China are
offering some assurances that the global economic slump may not
be as severe as previously feared, even if growth remains
fragile," Yuihama said.
Investors will now focus on HSBC China flash PMI for
November due on Thursday to see whether a low point for China,
the world's second largest economy, is over. U.S. manufacturing
figures are due later on Wednesday while those from Europe are
due on Thursday.
Trading activity was slowing ahead of the U.S. Thanksgiving
Going into the holiday, the dollar has been underpinned
broadly by data indicating a moderate U.S. recovery taking root,
while the yen remained under pressure, with more data showing
Japan's economy struggling.
Japan's exports fell 6.5 percent in October from a year ago,
dropping for a fifth consecutive month, weighed down by
weakening global demand and a territorial row with China, its
In the U.S. on Tuesday, a report showed housing starts rose
to the highest rate in more than four years in October.
The dollar rose to a 7-1/2-month high against the yen of
81.975 yen while the euro briefly touched a peak of
105.05 yen, its highest point since May 4.
A retreat in shares dragged oil lower, although prices
remained supported by a lack of ceasefire between Israelis and
Palestinians, which raised concerns about supply disruptions
from the Middle East.
U.S. crude futures pared earlier gains and were up
0.1 percent to $86.85 a barrel by midafternoon, and Brent crude
also trimmed earlier rises and wasup 0.2 percent at
Weak appetite for riskier assets also interest in Asian
credit markets subdued, with the spreads on the iTraxx Asia
ex-Japan investment-grade index tightening by 1