* Nikkei down 0.8 pct, ex-Japan Asian shares down 0.4 pct
* Oil prices firm as militants advance on Iraq oil town
* New Zealand dollar rises after RBNZ keeps hawkish bias
By Hideyuki Sano
TOKYO, June 12 Asian shares slipped on Thursday
after a retreat on Wall Street and escalating violence in Iraq
delivered a one-two punch to risk appetite, which in turn kept
oil prices near three-month highs.
Japan's Nikkei share average led the pull back,
falling 0.7 percent while MSCI's broadest index of Asia-Pacific
shares outside Japan dipped 0.3 percent.
A tentative start is expected for European shares after a
0.5 percent fall the previous day, with Britain's FTSE
seen rising 0.1 percent and Germany's DAX dropping 0.1
The S&P 500 lost 0.35 percent to 1,943.89, its first
significant loss in about three weeks. As recently as Monday it
hit a record closing high of 1,951.27.
"I think it was just natural profit-taking after the strong
rally we have seen so far. I continue to expect the world's
shares to remain solid," said Kensaburo Suwa, senior strategist
at Okasan Securities.
Some market players said a lower global growth forecast from
the World Bank was being used as grounds to sell while others
said fighting in Iraq may have sapped investor appetite.
Adding to the cautious mood, a surprise primary defeat of
the second-ranking U.S. House Republican, Eric Cantor, by a Tea
Party candidate stoked worries of a possible return of
acrimonious budget fights that in the past have caused
Fighting in Iraq also prompted concerns about the oil supply
outlook, lifting U.S. crude futures 0.3 percent to
$104.69 per barrel, near a three-month high of $105.06 hit on
Militants from an al-Qaeda splinter group captured Mosul,
the country's second largest city, and closed in on the biggest
oil refinery in Iraq.
The insurgency has also hurt financial markets in Turkey,
where stocks fell 3.3 percent and the lira
tumbled 1.7 percent on Wednesday as the militants took 80
Turkish nationals as hostage.
Among major currencies, the New Zealand dollar jumped 1.3
percent after the country's central bank raised interest rates
and retained a hawkish bias, surprising some investors who had
bet on a slower pace of rate hikes.
The kiwi hit a three-week high of $0.8661 and last
traded at $0.8658.
Other major currencies were little changed with the euro
still stuck near the four-month low hit after the European
Central Bank cut rates last week.
The euro traded at $1.3539, compared to low of
$1.3503 hit on Thursday. The yen fetched 102.06 yen on the
dollar, after hitting a one-week high of 101.86.
U.S. debt yields rose slightly, with the 10-year yield
hitting a one-month high of 2.662 percent after a
disappointing Treasury auction. It last stood at 2.642 percent.
Palladium was firm near a 13-year high hit the
previous day on supply worries from a five-month-long miners'
strike in South Africa.
It has gained 20 percent so far this year after the crisis
in Ukraine raised concerns on supply from Russia, the world's
(Editing by Kim Coghill & Shri Navaratnam)