* Asian stocks, excluding Japan, slip from 7-week highs
* Tokyo's Nikkei also in the red after subdued Wall St
* Dollar dawdles after snapping a three-day slide
* Lacklustre start seen for European stocks
By Ian Chua
SYDNEY, July 25 Asian stocks slipped from
seven-week highs on Thursday after Wall Street buckled under
profit-taking pressure and as investors retreated to the
sidelines with the earnings season heating up.
But a dearth of market-moving news saw the dollar struggle
to extend gains after snapping a three-day slide, while gold
found a tentative footing following a 2 percent fall.
MSCI's broadest index of Asia-Pacific shares outside Japan
eased 0.3 percent, having posted a seven-week
closing high just a day earlier. Tokyo's Nikkei closed
1.1 percent lower at 14,562.9, continuing to find resistance
ahead of the 15,000 mark.
Financial bookmakers expect a subdued start for European
stocks, although traders are hopeful that economic data will
provide a catalyst for more gains.
"A moderation in the Spanish unemployment rate and an
increase in the German IFO Business Climate should keep the
continent happy whilst closer to home the first reading for Q2
UK GDP is expected to confirm the bullish undercurrent,"
Jonathan Sudaria, a dealer at Capital Spreads in London wrote in
a morning note.
Investors were also waiting on key company results and
outlooks before deciding on whether to jump back in.
The earnings season has kicked off in earnest in major
financial centres including Japan, Europe and the United States,
keeping markets in check as investors gauge the business
outlooks amid challenging global growth prospects, including a
slowdown in China.
The decline in Asian bourses came after the U.S. S&P 500
index shed 0.4 percent, a modest move and yet still the
biggest fall in almost a month.
Analysts said Wall Street was taking a breather as investors
booked profits in a rally that has swept the index to a string
of record highs.
Currency investors lacked the drive to do much in Asia with
the dollar slipping 0.2 percent against a basket of major
currencies, erasing some of the gains made on Wednesday.
The dollar had ended a three-day fall after U.S. data showed
a further recovery in the housing market and an acceleration in
factory activity, supporting the Federal Reserve's view that the
economy will continue to recover gradually..
Treasury bond yields rose as a result, which in turn
provided support for the greenback. But there was a clear lack
of follow-through buying in Asia.
"We're still in summer, relatively thin markets so I
wouldn't expect the bounce (in the dollar) to be dramatic from
here," said Callum Henderson, global head of FX research for
Standard Chartered Bank.
The dollar dipped back below 100 yen, off an early
high of 100.45, while the euro edged up 0.1 percent to $1.3213
, recovering a bit of ground lost on Wednesday.
Against the yen, the common currency gave back some of its
overnight gains, easing to 132.09 from a two-month
peak around 132.74.
Investors had warmed to the common currency after closely
watched surveys showed unexpected growth in euro zone factories,
with Markit's flash Eurozone Composite PMI jumping to an
18-month high of 50.4 in July.
Data later on Thursday is expected to show Britain's economy
expanded at a faster pace in the second quarter, helped by
growing confidence among consumers and by signs that companies
are ready to borrow and spend more.
A standout currency was the New Zealand dollar, which made a
strong comeback after the country's central bank surprised some
by sounding slightly hawkish, even as it pledged to leave the
overnight cash rate (OCR) unchanged at a record low 2.5 percent
until year end.
"There was a clear tightening bias with acknowledgement that
the removal of monetary policy stimulus will 'likely' be needed
in the future," analysts at ANZ highlighted in a note.
"We're still picking early 2014. The precise date is
somewhat secondary with the real issue being at what pace and
regularity the OCR ends up being lifted. We're in the gradual
The kiwi was last at $0.7995, well off a low
of$0.7925 seen before the Reserve Bank of New Zealand rate
Doing less well, most commodities were under pressure given
ongoing worries about a slowdown in China.
Copper fell 0.4 percent to $7,023 a tonne, reversing
all of Wednesday's 0.2 percent rise. U.S. crude slipped
0.4 percent to $105 a barrel, extending its pullback from a
16-month high of $109.32 set last Friday.
"We think that China is going to continue to be under a bit
of pressure and that could weigh on the base metals market a bit
more," said Natalie Rampono, commodity strategist at Australia
and New Zealand Banking Group.
Spot gold, though, was steadier at $1,320 an ounce,
following a 2.0 percent slide on Wednesday.