RPT-GLOBAL MARKETS-Stocks slip, safety sought on US worries

                                
 * Stocks fall as U.S. economic data continue to disappoint
                                
 * Major Asian markets fall by up to 2 pct
                                
 * Yen hovers near 15-year peaks, intervention talk swirls
                                
 * U.S. 2-year yields near record lows
 (Repeats to more subscribers)
                                
 By Koh Gui Qing
                                
 SYDNEY, Aug 20 (Reuters) - Asian stocks fell on Friday and
the yen threatened to hit 15-year highs in the wake of
disappointing U.S. data that heightened worries about
slackening growth in the world's largest economy.
                                
 European shares opened a touch firmer but traders said the
sentiment remained fragile.
                                
 Investors looking for reasons to be cautious found backing
in data that showed U.S. jobless claims at a nine-month high
and the first contraction in a year in a volatile U.S. regional
manufacturing index. [ID:nN19350083]
                                
 That revived fears that the United States may be sliding
back into recession, or a "double dip", and tipped investors'
favour once more towards less risky havens such as gold, yen,
and U.S. and Japanese government bonds.
                                
 "Inflation is no longer the worry, the entire focus has
shifted to stagnation and deflation," said a Singapore-based
money markets trader. "The real worry is growth and it's not
looking good -- in the United States, the slowdown in China and
Japan is also not printing good numbers."
                                
 Most stock investors agreed.
                                
 Japan's Nikkei <.N225> fell 2 percent as the yen gained on
the dollar on haven bids, although expectations the Bank of
Japan (BoJ) may yet loosen monetary policy again limited the
slide.
                                
 Talk that Tokyo could intervene to weaken the yen also kept
the yen from testing a 15-year low of 84.72 hit last week. By
late afternoon, the dollar was steady at 85.30 yen <JPY=>, down
0.1 percent from New York.
 The MSCI stock index outside Japan <.MIAPJ0000PUS> shed 0.9
percent, with Australia <.AXJO> leading the way down on the
risk the nation may get a hung parliament after Saturday's
vote.
                                
 For the week however, the MSCI was on track for a modest
rise of 0.3 percent, but still far from recouping last week's
2.9 percent drop as worries about faltering growth intensified.
                                
 In Sydney, global miners BHP Billiton <BHP.AX> lost 1
percent and Rio Tinto <RIO.AX> dropped 2.2 percent, hurt by
talk their planned $116-billion iron-ore joint venture was
failing. [ID:nSGE67J006]
                                
 BHP was further weighed by its head-turning $39 billion
hostile bid for Canada's fertiliser producer Potash Corp
<POT.TO>, which may be the year's biggest corporate takeover.
                                
 The overall cautious tone supported gold at 1-1/2-month
highs [GOL/] and kept oil under pressure near six-week lows.
[O/R]
                                
 U.S. and Japan government bonds, seen as among the safest
of assets, either held or added to recent steep gains. U.S.
two-year yields <0#USBMK=> were near a record low of 0.48
percent, and 10-year yields near a 17-month trough of 2.56
percent.
                                
 Japan's five-year yields hit a seven-year low, in part on
talk the BOJ may further ease policy to weaken the strong yen
and shield exports, the lone bright spot in Japan's economy.
[JP/]
                                
 BLITHE ON SE ASIA
                                
 Yet, it is too hasty to conclude from the rally in bonds
that investors have little appetite for risk. Southeast Asia,
for one, showed the perennial prowl for yield is still on.
                                
 Stocks in Malaysia, Thailand, Indonesia, Philippines and
Vietnam were all up on Friday, outshining the rest of Asia.
[.SO]
                                
 The divergence is even greater for the year. Shares in
Jakarta have jumped 23 percent, and those in Bangkok are up
over 21 percent, ranking them as Asia's top two performers
after Sri Lanka's <.CSE> 65 percent surge.
                                
 No doubt gains are skewed by the smaller sizes of these
markets, but they are still impressive next to the MSCI's 2
percent drop for the year.
                                
 Southeast Asia's strong growth outlook, and its reasonable
valuation compared to more high-profile emerging markets such
as China have all been cited as reasons to buy the region's
assets.
                                
 "Here, you still have growth that is being revised up,
interest rates that are near record lows, and exchange rates
that are under appreciation pressures," said Tim Condon, an
economist at ING in Singapore.
                                
 "All these things are arguing for stocks to continue to
run."
 (Additional reporting by Umesh Desai in HONG KONG)
 (Editing by Kazunori Takada)