* Japanese, other Asian shares fall after recent rally
* Focus on global economy, banking system ahead of G20
* Yen gains on fund repatriation, dollar gains seen
overdone
* Safe-haven gold, Japanese bonds advance some
By Rafael Nam
HONG KONG, March 12 (Reuters) - Japanese shares fell more
than 2 percent on Thursday and other Asian markets were on the
defensive as confidence in a rally this week proved fleeting in
light of a shaky global economy and financial system.
European shares were also set to slide, reversing a two-day
winning streak. The yen rose against the dollar amid signs of
fund repatriation ahead of the end of Japan's fiscal year this
month, and perceptions that recent safe-haven inspired gains
for the U.S. currency had gone far enough.
Oil prices bounced from two days of sharp losses though the
focus remained on a meeting of OPEC this week and uncertainty
about whether the oil producers will cut production or not.
[]
Thursday's stock trading reflected a trend this year of
steep declines followed by bursts of small gains that quickly
fizzle as investors focus on the bleak global economy and
uncertainty about how to cleanse the banking system of toxic
debt.
"Investors are quite sceptical now," said Albert Hung,
chief investment officer at Alleron Investment Management in
Australia.
"They are behaving very cautiously ... which is prudent
because the economy is still in very poor shape and there are
no clear signs of recovery yet," he added.
Japan's Nikkei average <> fell 2.4 percent after
surging nearly 5 percent on Wednesday.
The MSCI index of shares elsewhere in Asia-Pacific
<.MIAPJ0000PUS> were down 0.7 percent as of 0710 GMT, cutting
into 5 percent of gains over the previous two sessions.
New signs of global economic weakness continued to sap
confidence. Revised data on Thursday confirmed Japan's economy
posted its sharpest contraction since the oil crisis of 1974 in
the final three months of last year. []
Forecasts are proving equally dire. World Bank President
Robert Zoellick told the Daily Mail newspaper the global
economy is on track for its worst recession since the 1930s,
with output likely to shrink by 1-2 percent this year.
[]
Scepticism about policy makers' ability to resolve the
global woes, and how the United States will cleanse its banking
system, pervades the run-up to the Group of 20 finance
ministers' meeting this weekend. []
The United States and Britain on Wednesday called on
leading economies to ramp up spending to break the global
recession and to complement efforts to revamp regulations to
prevent future financial crises. []
That call has already been met coolly by many European
nations, raising doubts about whether the G20 finance gathering
in England will make much headway.
DILEMMA
Major Asian stocks indexes, including in Australia <>,
China <>, Taiwan <> and Singapore <.FTSTI> fell.
Seoul <> shares ended flat, but Bombay shares <>
rose 2.3 percent as investors played catch-up with gains
worldwide following a two-day market holiday.
Among the big regional movers, National Australia Bank
<NAB.AX> shares rose 2.6 percent despite saying it would cut
its first-half dividend by a quarter, as investors felt
relieved that its overall business remained strong.
[]
But LG Display <034220.KS> slumped 6.5 percent after
Philips Electronics <PHG.AS> said it had sold its remaining
13.2 percent stake in the flat panel maker, while Japan's
Mitsubishi UFJ Financial Group <8306.T> lost 3.7 percent after
saying it will raise nearly $1 billion in preferred securities.
[] and []
Double digit losses on equity markets in the past month and
turmoil across the banking system have persuaded most
economists the global recession will get worse and a recovery
will be slow.
Reuters polls show the "Great Recession", as the IMF has
termed the global downturn, will clamp leading economies in a
vicious grip well into 2010 and push unemployment to multi-year
record. []
Sporadic signs of hope do appear, however, with data on
Thursday showing a surge in Chinese bank lending in February
helping offset a report that the country's industrial growth
had grounded down to a record low. []
The yen gained, sending the dollar to as low as 95.95 yen
on trading platform EBS, its weakest in two weeks. After
trimming some losses, the greenback was down 0.9 percent at
96.29 yen <JPY=>.
The New Zealand dollar briefly touched a two-week high of
$0.5145 after the country's central bank cut its interest rates
by 50 basis points to a record low of 3.00 percent. The cut was
smaller than some had expected.
The currency later fell back to $0.5134 <NZD=D4>, down 0.2
percent on the day. [] []
Oil futures <CLc1> rebounded 60 cents to $42.93 a barrel,
cutting back on a 10 percent drop over the previous two
sessions that had been sparked by bearish data from the United
States and China, the world's two largest oil consumers.
Gold <XAU=> regained some of its safe-haven appeal, rising
about $8 to $913.70 an ounce, following recent drops sparked by
concerns over weak demand.
Japanese June government bond futures climbed 0.42 point to
138.92 <2JGBM9> after a smooth five-year auction showed banks'
demand for JGBs remained solid.
