* Chinese shares advance, extending Friday’s gains on upbeat data
* Asian shares ex-Japan rise to two-week high
* Yen reverses early gains but Nikkei falls to six-week lows
* Gold rises to nearly two-week highs
By Dominic Lau
TOKYO, Aug 12 (Reuters) - Most Asian shares rose on Monday and Chinese stocks surged to a one-month high as investors took heart from last week’s upbeat data from the world’s second-biggest economy, but Japan’s Nikkei fell to a six-week low after softer second-quarter GDP.
European shares were expected to open firmer, with Britain’s FTSE 100 seen up as much as 0.3 percent and Germany’s DAX up as much as 0.1 percent, according to financial spreadbetters. U.S. stock futures were flat.
China’s CSI300 climbed 2.1 percent, extending last Friday’s rise after factory output grew in July at its fastest pace since the start of the year.
Data released after the market close on Friday was equally positive, showing Chinese new bank loans and money supply for July came in higher than expected despite a fall in a broad measure of liquidity.
“Apart from the government announcement supporting the environmental protection sector, the latest batch of economic data is lifting some pressure on traditional cyclical sectors,” said a Shanghai-based dealer with a major Chinese brokerage.
Worries about slowing growth in China and uncertainty on when the U.S. Federal Reserve would start to trim back its massive stimulus have roiled markets in recent months. Last week’s Chinese data raised hopes that growth in Asia’s economic powerhouse may be stabilising.
The strong gains in Chinese stocks buoyed Asian shares, with the MSCI Asia-Pacific ex-Japan index index up 1 percent to a two-week high.
JAPAN‘S GROWTH SLOWS
Japan’ Nikkei share average shed 0.7 percent to its lowest since June 28 after data showed its economy grew at a slower-than-expected pace in April-June, triggering investors to cut their risk exposure.
But the yen reversed early gains to trade down 0.2 percent at 96.510 yen to the dollar. Earlier, it had strengthened as much as 0.4 percent to 95.92 yen to the dollar, not far from a seven-week peak of 95.810 yen touched last week, and hit a six-week high at 127.97 yen to the euro.
Japan, the world’s third-largest economy, grew an annualised 2.6 percent in the second quarter, a third straight quarter of expansion but slower than a downwardly revised 3.8 percent rate in the first quarter.
The median forecast was for annualised growth of 3.6 percent, and so the data may heighten calls to delay a planned sales tax increase given concerns it could prolong Japan’s escape from deflation.
Yields on benchmark 10-year Japanese government bonds , which move opposite to prices, edged down 0.5 basis point to a three-month low of 0.745 percent.
The yen has fallen 11 percent against the dollar this year as Prime Minister Shinzo Abe pushed for fiscal and monetary expansionary policies to revive the economy, while the Nikkei is up 30 percent during the same period.
The dollar added 0.1 percent against a basket of major currencies on Monday.
STRONG SINGAPORE‘S GROWTH
Singapore’s economy grew at a better-than-expected pace in the second quarter and the government raised the city state’s outlook for the year on expectations for a gradual pick up in global growth in coming months.
Singapore’s stocks were up 0.2 percent, underperforming the regional market, however.
U.S. stocks fell on Friday, posting their biggest weekly decline since June as investors focused on when the Fed would begin pull back its stimulus.
In commodities markets, copper prices slipped 0.3 percent to around $7,250 a tonne after climbing 1.3 percent to a two-month high on Friday on the back of the upbeat Chinese factory data.
They rose 3.9 percent last week to log their best weekly gain in almost a year.
Gold rose 1.3 percent, extending a 0.3 percent rise in the previous session and heading for a fourth straight day of winning streak.
Brent crude prices dipped 0.1 percent but held above $108 a barrel after they advanced 1.4 percent on Friday to snap a five-day run of loss - the longest since April.