* Nikkei falls more than 1 percent as financials slump
* Ratings cut won't trigger heavy bond selling - Citi
* Dollar trims most of its gains versus yen on debt worries
HONG KONG, Jan 28 (Reuters) - Asian stocks eased on Friday
before a slew of earnings from corporate heavyweights in the
region, while Japanese government bond futures rose despite a
ratings cut.
* The MSCI index of Asian stocks outside Japan
fell 0.3 percent in early deals despite an
overnight rally on Wall Street. The Nikkei fell by more
than 1 percent, weighed down by financial stocks.
* Since the start of 2011, Asian stocks have underperformed
the MSCI world index , which has risen by 2.5
percent, as investors have booked profits, particularly in
markets, which are seen vulnerable to inflationary pressures.
* On Thursday, Standard & Poor's cut Japan's credit rating
by a notch for the first time since 2002 and Moody's warned that
it might turn negative on the U.S. rating outlook if the deficit
continued to swell. .
* March 10-year futures opened lower, but quickly
reversed losses to be up 0.17 points at 139.95 as the downgrade
had largely been seen as a matter of time. On Thursday evening,
it fell to as low as 139.48 immediately after the downgrade.
* Ten-year yields edged lower to 1.215
percent, moving further away from this month's peak of 1.260
percent hit last week.
* Citigroup analysts said the downgrade might dissuade
regional reserve managers from investing in Japanese assets on
the margin but won't trigger a large scale dumping of bonds.
* The euro held most of its 1 percent gain at 113.71
after hitting a two-month peak around 114.00. In
contrast, the dollar, after rallying by a big figure to as high
as 83.22 yen , it lapsed to 82.87 in early Asian trade.
* Gold held near four-month lows, after falling more
than two percent in the previous session, as safe-haven demand
was depressed by a steady drip of positive data from Europe and
the United States.
(Additional reporting by Ayai Tomisawa and Shinichi Saoshiro
in TOKYO)
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http://blogs.reuters.com/globalinvesting
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http://blogs.reuters.com/macroscope
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http://blogs.reuters.com/hedgehub
