* Yen hits 7-week high on U.S. recovery uncertainty
* Shanghai stocks rise 2 pct after regulator assurance
* Investors are in "fatigue mood" after torrid equity
rally
(Repeats to more subscribers)
By Kevin Plumberg
HONG KONG, Sept 3 (Reuters) - Japan's stocks slipped and
the yen hit a seven-week high on Thursday on unease that
Friday's U.S. employment picture may reflect a slower recovery
than investors have priced into markets, raising uncertainty
about riskier assets.
Government bonds edged higher and gold remained near a
three-month high reached on Wednesday, after a survey of the
U.S. private sector labour market in August showed more job
losses than expected, increasing nervousness about the official
payrolls figure at the end of the week.
The data clouded the outlook further, with investors torn
between a quicker-than-expected recovery in manufacturing
around the world and optimism in the technology sector on one
hand, and on the other evidence that U.S. consumers are still
not spending.
"It seems the market keeps on pricing more uncertainty
about the sustainability of the recovery," said Sebastien
Barbe, senior economist with Calyon in Hong Kong, in a note.
Barbe characterised investors in Asian markets as being in
a "fatigue mood," since they have been much less likely to buy
riskier assets such as equities and emerging market currencies
and bonds, even with a steady flow of relatively positive
economic data.
Japan's Nikkei share average was down 0.5 percent, led by
Honda Motor Co stock <7267.T>, which was down 2.4 percent.
"We're in a situation now where expectations outpaced
reality over the last two months. This is just a natural
adjustment, even though the economy is over the worst," said
Hiroichi Nishi, general manager at the equity division of Nikko
Cordial Securities in Tokyo.
Shares of Fast Retailing <9983.T> were up 4.5 percent,
limiting losses on the index, after the clothier said it wanted
to boost annual sales more than seven-fold to $54 billion by
2020 and become a global fashion powerhouse. []
The MSCI index of Asia shares traded outside Japan rose 0.3
percent <.MIAPJ0000PUS>, with strength in the Hong Kong and
Taiwan markets bolstering the index.
The index dithered in August, though it is still up 71
percent from March 9, when investors began to price in a robust
recovery. By contrast, the all-country world equities index
<.MIWD00000PUS> is up 48 percent since then.
Shanghai's stock market <> rose 2.2 percent after a
top securities regulator said late Wednesday the market was
healthy and pledged to keep it stable, driving some investors
in search of bargains after a 22 percent plunge in August.
The lift in Chinese shares was enough to raise U.S. stock
futures <SPc1> and push down U.S. Treasury futures <TYc1>.
Global investors have been keeping an eye on the domestic
Chinese market, which is largely closed to foreigners, fearing
rapidly declining share markets could signal slowing growth.
The index poked back above the 125-day moving average, what
Chinese investors believe is the divider between bull and bear
markets, after falling below it on Monday.
DOLLAR DIPS
The U.S. dollar fell briefly below 92 yen for the first
time since July 13, before clawing back to 92.15 yen <JPY=>,
down 0.1 percent on the day.
The Australian dollar has been a favourite among investors
for most of the last six months because of its relatively high
yield and positive growth prospects among developed currencies.
However, it has been drifting lower since August and was down
0.2 percent to 76.75 yen <AUDJPY=R>.
The yen has a high probability of rising further, pushing
the dollar below 90 yen, said Tohru Sasaki, chief currency
strategist with JPMorgan in Tokyo. Such gains would further
pressure Japanese stocks.
"We have previously highlighted yen-positive factors such
as Japanese HIA, foreign investor flow into Japanese equities,
and the build-up of yen short positions by retail investors
through FX margin trading. In addition, the recent fall in US
long-term yields may also have positive implications for yen,"
Sasaki said in a note.
U.S. crude for October delivery was steady around $68 a
barrel. Oil fell around $5 a barrel on Monday and Tuesday on
fears about energy demand in a soft recovery ,but a weaker U.S.
dollar and steep decline in gasoline inventories supported it
on Wednesday.
Copper for three-month delivery on the London Metal
Exchange <MCU3> fell $23 to $6,152 a tonne.
(Additional reporting by Elaine Lies in TOKYO)
(Editing by Kim Coghill)
