* MSCI Asia ex-Japan down, before Friday China data
* Dollar, euro extend losses vs yen ahead of BOJ meeting
* Australia employment falls, boosts odds for rate cut
* Shares of Japanese suppliers of Dreamliner sold off
By Chikako Mogi
TOKYO, Jan 17 Asian shares fell on Thursday,
erasing earlier gains amid worries about the global growth
outlook as investors remained cautious ahead of Chinese data on
The MSCI's broadest index of Asia-Pacific shares outside
Japan fell 0.2 percent, extending declines for a
third consecutive session, led by a slump in Chinese shares. The
index's financial sector was down 0.2 percent
despite robust earnings reports overnight from Goldman Sachs
and JPMorgan Chase.
The Shanghai Composite Index slid 1 percent,
retreating further from a 7-1/2-month high and wiping earlier
gains in Hong Kong which fell 0.1 percent.
Shares of Japanese suppliers of Dreamliner declined after
U.S. regulators said it would temporarily ground Boeing Co's
787s after battery failures caused one of the Dreamliner
passenger jets to make an emergency landing in Japan.
GS Yuasa Corp, which makes the batteries for
Boeing's new 787 Dreamliner, tumbled 5 percent while Mitsubishi
Heavy Industries Ltd, which makes the wings, dropped
Growth-sensitive sectors dented Hong Kong shares ahead of a
slew of key Chinese economic data including fourth-quarter GDP,
December industrial output, retail sales and house price, which
will offer clues on the health of Asia's biggest economy.
"I think people are still just taking profit from the
out-sized jump in the A-share market earlier this week," said
Hong Hao, chief equity strategist at Bank of Communication
International Securities, referring to onshore Chinese shares
where foreign investors have limited access.
"We are early in this rotation into cyclicals at the start
of a new economic cycle in China, so some are still operating as
in a bear market, selling into strength and clocking profits by
rotating swiftly between sectors," Hong added.
Australian shares bucked the general bear trend and
added 0.4 percent to a 20-month closing high, after data showing
an unexpected fall in Australian employment in December raised
the chances for another interest rate cut. The prospect of
further policy easing sent the Australian dollar down to session
lows of $1.0494 from $1.0560 before the data.
Investor concerns about the global economy flared again
after the World Bank on Wednesday sharply cut its outlook for
world growth this year.
European markets are seen easing, with financial
spread-betters predicting London's FTSE 100, Paris's
CAC-40 and Frankfurt's DAX would open down as
much as 0.2 percent. A 0.1 percent fall in U.S. stock futures
hinted at a weak start on Wall Street.
YEN NERVOUS BEFORE BOJ
The dollar and the euro were choppy, as both currencies
pared back some of their recent outsized gains against the yen
after a Japanese official this week expressed concerns about
excessive yen weakness.
The yen is expected to remain on a weakening trend amid
expectations for bolder BOJ monetary easing measures as part of
the new government's push to drive Japan out of years of
deflation and economic slump.
But markets were nervous about their short yen positions
ahead of the Bank of Japan's Jan. 21-22 policy meeting, with
traders expecting the BOJ to adopt a 2 percent inflation target
next week. Some market players say there could be selling in
dollar/yen afterwards, based on "buy the rumour, sell the fact."
"The BOJ will probably disappoint to some degree. They'll
deliver what the market expects but no more than that," said
Gareth Berry, G10 FX strategist for UBS in Singapore.
Japan's benchmark Nikkei average closed up 0.1
percent, after tumbling 2.6 percent for its largest daily
decline in eight months on Wednesday.
The dollar rose 0.4 percent to 88.71 yen, off its
peak since June 2010 of 89.67 touched on Monday, while
the euro gained 0.4 percent to 117.95 yen, after
surging to its highest since May 2011 of 120.13 yen on Monday.
COMMODITIES SEEN RISING
While investor concerns remain about the global economy, the
relatively better risk environment is seen benefiting
commodities, but instability in the Middle East and Africa and
tensions between Japan and China could undermine sentiment.
"Investment focus for 2013 is shifting to economically
sensitive areas as global recovery takes place, boosting
commodities prices," said Naohiro Niimura, a partner at research
and consulting firm Market Risk Advisory.
The rally in platinum to 3-month highs this week,
regaining its premium over gold for the first time since
March 2012, is an indication of risk positive tone, he said.
Brent futures slipped on Thursday as signs of a weakening
global economic outlook revived demand worries, but the contract
stayed above $109 a barrel on supply concerns after Islamist
militants attacked an Algerian gas field.