* Spreadbetters see subdued open for European shares
* Concerns about possible U.S. govt shutdown, lack of Fed
* Euro remains under pressure after downbeat German
* U.S. data supports Fed's decision to hold off on stimulus
* Oil edges up on hopes for thaw in U.S., Iran relations
By Lisa Twaronite
TOKYO, Sept 25 Asian shares turned in a
lacklustre performance and the dollar treaded water against a
basket of currencies on Wednesday, as concerns about a possible
U.S. government shutdown and uncertainty about the Federal
Reserve's policy outlook made investors hesitant to push out of
This subdued trading pattern was also seen likely in Europe,
where financial spreadbetters predicted Britain's FTSE 100
to open flat to 8 points lower, Germany's DAX
to open flat to 2 points lower, and France's CAC 40 to
fall 2 to 3 points.
Tea Party-backed U.S. senators are threatening to stall a
bill to fund the U.S. government.
Fears are growing in Washington that political dysfunction
might lead to a default next month if lawmakers don't authorize
"It's negative to investor sentiment as a whole," said
Hikaru Sato, senior technical analyst at Daiwa Securities in
Tokyo, referring to the political wrangling in the U.S. capital.
MSCI's broadest index of Asia-Pacific shares outside Japan
slipped about 0.2 percent, while Japan's Nikkei
stock average skidded 0.8 percent.
The dollar gave up early slight gains against its Japanese
rival, edging down 0.1 percent to buy 98.61 yen. But it
rose fractionally against a basket of six currencies to 80.569
, as sagging shares sapped investors' tolerance for risk.
The euro was flat on the day, changing hands at
$1.3472. Support at its August high of $1.3453 held throughout
the Asian session, even as the European unit was pressured by a
disappointing German survey overnight.
The September Ifo survey of German business sentiment,
released on Tuesday, showed a slight improvement from the
previous month to a 17-month high, but still fell short of the
consensus forecast. The survey came a day after European Central
Bank President Mario Draghi said the bank was prepared to do
more to support the region's nascent recovery.
"It seems like an improvement in the euro zone economic data
has stalled. In addition, now that Germany's election is over,
the market could dust off the issues that had fallen out of
focus, such as further aid to Greece," said Masafumi Yamamoto,
forex strategist at Praevidentia Strategy.
On Wall Street on Tuesday, U.S. stocks mostly ended lower,
extending their slide to a fourth session. The Dow Jones
industrial average slipped 0.42 percent, the Standard &
Poor's 500 Index 0.25 percent, and the Nasdaq Composite
Index managed a modest gain of 0.08 percent.
U.S. DATA VALIDATES FED'S DECISION TO STAND PAT
New York Fed President William Dudley, in an interview on
CNBC on Tuesday, defended the central bank's surprise decision
last week to refrain from tapering its stimulus because the U.S.
economy was weaker than the Fed thought in June. Dudley, a known
dove, said he "wouldn't rule out" a stimulus reduction later
U.S. economic data on Tuesday was mixed and lent credence to
the Fed's decision to hold policy steady. U.S. home prices
gained in July, but consumer confidence slipped in September,
underscoring the possibility that higher interest rates and a
sluggish economy could impede housing market recovery.
Asian shares had rallied after the Fed's decision, and some
fear the scale of the reaction portends trouble for some Asian
emerging markets when the U.S. central bank eventually does cut
back on its asset purchases.
Some emerging market currencies remained under pressure. The
Indonesian rupiah fell 1 percent on Wednesday, matching a 4-1/2
year low hit in the previous session.
On the commodities front, steady buying from top consumer
China pushed copper futures up 0.4 percent to $7,176.50,
putting them on track to snap a three-session losing streak
fuelled by supply concerns and uncertainty about the Fed's
Gold rose 0.1 percent to $1,324.30 an ounce,
extending some of Tuesday's gains which had followed three
sessions of losses.
Oil prices firmed against a backdrop of hopeful signals that
longstanding tensions in the Middle East could be easing. U.S.
President Barack Obama on Tuesday cautiously embraced overtures
from Iran's new president as the basis for a possible nuclear
deal, but a failed effort to arrange a simple handshake between
the two leaders underscored entrenched distrust that will be
hard to overcome.
"There are some hopes there might be a gradual forging of
relationship between the west and Iran, though it's still very
early days," said Ric Spooner, chief market analyst at CMC
Markets in Sydney.
Front-month Brent crude for November delivery rose
about 0.6 percent to $109.27, while November U.S. crude
added 0.5 percent to $103.68 a barrel.