TOPWRAP 1-Japan deflation deepens; US jobs, German news cheer
* Japanese wholesale prices slump 6.6 pct, deflation deepens
* U.S. jobs data cheer, but Asian stocks give up gains
* S.Korean GDP grows 2.3 pct in Q2, fastest in 5-½ years
* China, France call for debate on alternative to dollar
* IMF's Strauss-Kahn says some nations may need more stimulus (For more on the financial crisis, click on [nCRISIS])
TOKYO, July 10 (Reuters) - Japanese price data on Friday showed the world's No. 2 economy was still struggling to find its feet and contrasted with encouraging U.S. jobs figures and news from Germany that briefly lifted global stocks and commodities.
Japanese wholesale prices fell a record 6.6 percent in June from a year earlier, reinforcing fears that the economy was poised for a second, possibly damaging spell of deflation this decade.
(For a graphic for Japan's wholesale and consumer prices, click: here)
The data follows a weekly U.S. jobs report that showed a sharp drop in unemployment claims and comments from a senior German government official who told Reuters that Europe's biggest economy may have emerged from recession in the second quarter.
The news helped lure investors back to riskier assets on Thursday, helping Wall Street stocks end a touch higher and snapping oil's six-day losing streak, while curbing the appeal of safe-haven government debt.
Asian shares, however, were unable to make any headway on Friday, with the Nikkei average .N225 barely changed after Thursday's 1.4 percent drop. Stocks elsewhere in Asia-Pacific .MIAPJ0000PUS were also virtually flat, reflecting caution ahead of quarterly earnings reports and economic data.
HOT AND COLD
Seoul shares fell after a brief lift following Bank of Korea's estimate that Asia's fourth largest economy grew at its fastest rate in 5-½ years in the second quarter. The central bank also raised its full year forecast to a 1.6 percent contraction from 2.4 percent seen earlier. [ID:nSEO216924]
Since the first quarter of this year, when the first signs began emerging that the world's worst recession since World War Two might have already hit the bottom, markets have been on the lookout for any tangible signs of actual recovery.
But so far economic statistics and company reports have been mixed, blowing hot and cold on the idea that a recovery was round the corner. Continued...
