* Nikkei extends losses on earnings, economic worries
* Yen steady, little reaction to Tokyo election
* Crude holds near $60 a barrel
(Repeats to more subscribers)
By Lincoln Feast
SINGAPORE, July 13 (Reuters) - Japan's Nikkei fell for a
ninth straight day on Monday as concerns about company earnings
outlooks weighed on Asian stocks, while oil languished near a
six-week low as faith in a rapid economic recovery faded.
The yen was steady against other major currencies, showing
little reaction to the resounding weekend defeat of the
Japanese ruling bloc of Prime Minister Taro Aso in a key local
election.
A strong second-quarter rally, the summer holiday season in
the northern hemisphere and resurgent doubts about the strength
of the global economy have combined to dull investor appetite
for riskier assets such as stocks and commodities.
Oil prices dropped 11 percent last week in their biggest
weekly decline since late January amid mounting worries that a
economic rebound may not be coming soon to help spur flagging
fuel demand. "The market has been too optimistic about a
global economic recovery later this year, but that now looks
unlikely to happen, so oil prices are languishing," said David
Moore, a commodities analyst at the Commonwealth Bank of
Australia.
U.S. light, sweet crude <CLc1> was up a cent at $59.90 a
barrel, within striking distance of Friday's six-week low of
$58.72.
Stocks are also in a steady downtrend.
The Nikkei average <> has now fallen almost 10 percent
from its late-June peak, trading down 1 percent on Monday.
MSCI's measure of stocks elsewhere in the Asia-Pacific
<.MIAPJ0000PUS> has fared a little better, 8.1 percent below
its June peak, but was down 1.4 percent on Monday.
Taiwan's benchmark index <> led declines, falling 3
percent on concerns an upcoming financial services agreement
with China may be delayed, hurting banking shares.
Seoul's KOSPI <> was also weak, with reports about the
ill-health of North Korean leader Kim Jong-il weighing.
"Speculation that Kim Jong-il is suffering from pancreatic
cancer has negatively affected markets...such news highlights
South Korea's geopolitical risks and the one thing that
investors hate is any uncertainty," said Lee Kyoung-su, a
market analyst at Taurus Investment & Securities.
[]
YEN EYES EQUITIES
The poor run for equities has affected other financial
markets, particularly the currency markets.
"Equities fell globally last week with U.S. shares falling
for the fourth straight week, and the key is whether that will
continue," one currency trader said.
The yen had risen on Friday, notching its best weekly gain
against the greenback since October, and the dollar rose
against other currencies amid fears of weak U.S. corporate
profits and fading hopes for a global recovery.
A report showing U.S. consumer sentiment soured in early
July also boosted the two currencies on Friday. The dollar and
the yen can rise if investors sell risky assets such as stocks
and commodities and buy back the low-yielding dollars and yen
used to finance those purchases.
The dollar rose 0.1 percent to 92.68 yen <JPY=>, inching
away from a five-month low of 91.77 yen hit on trading platform
EBS on Friday.
But the dollar dipped against the euro, with the single
European currency rising 0.2 percent to $1.3971 <EUR=>,
regaining some of the ground it lost against the dollar on
Friday.
Government bonds have been the main recipient of money
flowing out of the equity and commodity markets as investors
seek a relatively safe parking place for their cash over the
summer.
Yields on two- and five- year Japanese government bonds hit
multi-year lows last week and demand remained solid on Monday.
Ten-year Japanese government bond futures <2JGBv1> held at
138.85, having rallied from a low of 135.47 last month.
(Editing by Kim Coghill)
