* Asian shares seen subdued after soft finish for Wall St
* Strong U.S. jobs numbers heighten Fed angst ahead of payrolls
* Dollar gets some support from higher Treasury yields
By Wayne Cole
SYDNEY, Dec 5 (Reuters) - Asian markets were off to a nervous start on Thursday as never- ending speculation about the fate of U.S. stimulus lifted bond yields while helping the dollar pare losses against the yen.
Early attention will be on Japan’s Nikkei after it suffered the biggest one-day fall in six weeks on Wednesday, a day after hitting a six-year closing high. The Nikkei ended down 2.2 percent, but was still up 48 percent for the year so far.
Nikkei futures were trading at a slight discount on Thursday, suggesting a soft start was possible. MSCI’s broadest index of Asia-Pacific shares outside Japan was flat in early trade.
There was nothing but indecision out of Wall Street where the Dow Jones industrial average edged down 0.16 percent, while the S&P 500 eased 0.13 percent.
Shares had taken a hit after a strong reading on private hiring led to speculation that payrolls could also be upbeat and perhaps hasten the day when the Federal Reserve starts trimming its asset buying.
Other data on services and housing was more mixed, but the risk was enough to send 10-year Treasury yields about 7 basis points higher on Wednesday to 2.84 percent.
Ironically, a sustained increase in long-term yields is exactly what the Fed is trying to avoid, so the rise argues against a start of tapering at this month’s policy meeting.
The lift in yields helped the U.S. dollar regain ground on the yen to stand at 102.37 early Thursday, up from a low of 101.82.
A major mover was the Canadian dollar which sagged to 3-1/2-year lows after the Bank of Canada issued a dovish policy statement, highlighting the risks of undesirably weak inflation.
The euro was steady at $1.3590, having bounced from a trough of $1.3527 on Wednesday. Service sector data had showed activity in Italy and France contracting in November but expanding in Spain and Germany, highlighting the divergence in the bloc.
There was more good news for Spain as Moody’s upgraded its credit outlook to stable from negative, citing a rebalancing of and a brighter medium-term view for the country’s economy.
Investors were now looking ahead of a policy meeting by the European Central Bank. While the consensus is that the central bank will not announce any new measures, markets are nervous having been taken off guard by November’s rate cut.
“We think the Refi rate, the deposit rate, and the forward guidance will be kept unchanged,” said Philippe Gudin, an analyst at Barclays. “The focus will be on the presentation of staff projections for 2014 and 2015, and in particular on inflation forecasts.”
If the region’s recovery continues, the ECB may be done easing for this cycle.
“Should economic activity fail to gain momentum or deflation concerns materialise, we think further monetary easing would be decided,” added Gudin. “Although this is not our baseline scenario, we think the probability is non-negligible.”
In commodity markets, spot gold was holding at $1,242.89 an ounce having bounced 1.7 percent on Wednesday.
U.S. crude added another 12 cents to $97.32 on top of a 1.2 percent rally on Wednesday after data showed domestic crude stocks fell by 5.6 million barrels, snapping 10 straight weeks of builds.
Going the other way, Brent crude finished down 97 cents on Wednesday at $111.65 a barrel after initially rising to the highest since Sept. 12 at $113.02.