RPT-GLOBAL MARKETS-Asian shares edge higher; caution lingers

                                
 * Asian shares edge higher; but investor mood is cautious
                                
 * Dollar retreats as safe-haven bid eases
                                
 * Japanese bonds dip ahead of central bank policy decision
 (Repeats to more subscribers without changes in text)
                                
 By Rafael Nam
                                
 HONG KONG, Feb 19 (Reuters) - Asian shares edged higher on
Thursday as recent selling pressure eased and the safe-haven
bid for the dollar and gold retreated, but reminders of the
global economic gloom and financial sector woes kept investors
cautious.
                                
 Weak U.S. housing and industrial output data, along with
the concerns that worsening economies in central and eastern
Europe could put more pressure on European banks, is raising
the prospects of more weakness in global markets.
                                
 Japanese government bonds dipped ahead of a policy decision
by the central bank, which is expected to keep rates unchanged
but focus on further steps to help corporate financing.
[ID:nT186413]
                                
 Some analysts predict the yen's days as a safe-haven may be
limited because of the mounting evidence of a deepening
contraction in Japan, the world's second-largest economy.
                                
 "There is an emerging view that the yen may not be so
appropriate to buy, unlike before, at times of risk aversion,"
said Minoru Shioiri, chief manager of forex trading at
Mitsubishi UFJ Securities.
                                
 The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> gained 0.3 percent as of 0235 GMT, but it was
still down about 6 percent for the week.
                                
 Data on Wednesday showed U.S. housing starts and building
permits dropped to record lows in January, with U.S. industrial
output shrinking more than expected last month. [ID:nN18424301]
                                
 These reports come as European banks such as ING <ING.AS>
posted losses and as central and eastern European currencies
suffer because of risk aversion on concerns about the region's
declining growth and heavy overseas debt. [ID:nLI247678] and
[ID:nLI344803]
                                
 Despite actions by policy makers -- including the U.S.
pledge on Wednesday of up to $275 billion to help stem a wave
of home foreclosures and Germany's approval of a draft law to
allow forced bank nationalisations -- investors remained wary
about the market outlook. [ID:nLI431726] and [ID:nN17400254]
                                
 In Asia, Japan's Nikkei <.N225> rose 0.5 percent after
hitting four-month lows on Wednesday and Australia <.AXJO>
advanced 1.6 percent.
                                
 But Singapore <.FTSTI> fell more than 1 percent, while
South Korea <.KS11>, Hong Kong <.HSI> and Taiwan <.TWII>
slipped less than 1 percent.
                                
 WEAK GROWTH AHEAD
                                
 The optimism at the beginning of the year that a global
economic recovery could be at hand by the second half is
dissipating.
                                
 The U.S. Federal Reserve projected the world's largest
economy would shrink by between 0.5 percent and 1.3 percent
this year, minutes of its Jan. 27-28 policy meeting showed.
[ID:nN18452208]
                                
 In its previous quarterly forecast in October, the Fed had
expected a decline of 0.2 percent to growth of 1.1 percent this
year.
                                
 The dollar -- which tends to benefit from safe-haven bids
-- dipped 0.2 percent from late New York trade to 93.65 yen
<JPY>. On Wednesday, it hit its highest level since Jan. 7 on
trading platform EBS.
                                
 The yen is coming under pressure due to worries about the
contracting Japanese economy and political uncertainty as voter
support for Prime Minister Taro Aso sinks.
                                
 The euro edged up 0.3 percent to $1.2568 <EUR=>, recovering
from a three-month low of $1.2513 touched the previous day.
                                
 Some Asian emerging currencies were more stable after
recent slides. The won <KRW=> stood at 1,469.2/0.3 per dollar,
marginally below Wednesday's domestic close <KRW=KFTC> after
South Korea on Thursday dismissed concerns that local banks
might fall under the weight of their foreign debts.
[ID:nSEO219955]
                                
 Other safe-haven bids also retreated, though trading
activity was largely subdued.
                                
 March 10-year Japanese government bond (JGB) futures dipped
0.05 point to 139.59 <2JGBv1>, pulling back from a three-week
high of 139.79 hit on Wednesday ahead of the BOJ meeting.
                                
 The benchmark 10-year JGB yield edged up 0.5 basis point to
1.255 percent <JP10YTN=JBTC>.
                                
 Gold <XAU=>, which rallied to a seven-month high on
Wednesday, dropped about $7 to $977.40 an ounce as it
consolidated gains.
                                
 Oil prices <CLc1> were steady at $34.62 a barrel.