* Asian stocks pull back from 22-month highs, fall 1 pct
* Nikkei slips 1.35 pct as yen-weakening halts
* Dollar up vs. most Asian currencies
* European shares set to open lower
* Emerging market bond funds see record inflows: EPFR
by Vikram S Subhedar
SINGAPORE, April 16 (Reuters) - Asian stocks retreated from
22-month highs, and higher-yielding currencies fell, as
investors booked profits after risky assets ran up in recent
sessions on the back of good economic data.
Shares in China <> and Hong Kong <> were dragged
down by property firms after tightening measures in the sector
showed Beijing using more means to tighten policy, raising
worries of more clamp-down measures to come.
U.S. stock futures <SPc1> slipped 0.5 percent after Google
Inc's <GOOG.O> results after the close came short of some
market forecasts and the dollar's gains against Asian
currencies as well as higher government bond prices pointed to
a sentiment shift away from risky assets.
"Having seen double digit gains in share markets since
early February, with expectations running very high coming into
the U.S. March quarter profit-reporting season and China still
in tightening mode, there is a high risk of a short-term pause
or correction in share markets." Shane Oliver, head of
investment strategy at AMP Capital Investors, said in an
emailed note to clients.
European shares were seen falling on Friday, trimming lofty
gains made over the past two sessions, as investors awaited
quarterly results from global conglomerate General Electric
<GE.N> and fresh insight on the outlook for company profits.
Financial spreadbetters expected Britain's FTSE 100 <>
to open 17 to 18 points lower, or as much as 0.3 percent down,
Germany's DAX <> to open 21 to 30 points lower, or as
much as 0.5 percent, and France's CAC-40 <> to open 11 to
15 points lower, or as much as 0.4 percent.
Stock markets could be on the verge of a correction after a
strong run-up, as investors take some profits and shift funds
into safer havens.
While valuations are not expensive, investors are caught
between an overheating Chinese economy that may prompt stricter
interventionist measures and the U.S. economy which still
appears fragile, Alvin Chong, head of research at Sun Hun Kai
Financial, said.
"In this environment investors are not willing to take on
more risks," Chong said.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> fell more than 1 percent following a 16 percent
rally from a February low.
Regional information technology <.MIAPJIT00PUS> and
consumer staples stocks <.MIAPJCS00PUS> led the fall while
Asian healthcare <.MIAPJHC00PUS> was the only group that was
mildly positive.
Japan's Nikkei average dropped 1.49 percent, its sharpest
fall in over seven weeks, with a firmer yen offering investors
an excuse to take profits in exporters such as Tokyo Electron
<8035.T>.
"Expectations for solid earnings appear to have run their
course as you can see in today's banking shares. The focus is
now shifting to this financial year to March rather than
immediate numbers," said Hiroaki Kuramochi, chief equity
marketing officer at Tokai Tokyo Securities.
The Shanghai Composite Index <> fell 0.81 percent in
morning trade on a day when China launched trade in its first
stock index futures, marking a milestone move as it attempts to
deepen the country's young financial markets.
Property shares led the fall after the government announced
fresh measures to cool the sector, including increasing
mortgage rates and down payment requirements. []
LOW RISK
The dollar dipped 0.4 percent against the yen to around
92.67 yen <JPY=> but the dollar index, reflecting its trade
against a basket of major currencies, rose 0.2 percent.
The dollar showed more solid gains against Asian currencies
with the Korean won <KRW=> dropping 0.6 percent and the
Malaysia ringgit <MYR=> down 0.5 percent.
The Australian <AUD=> and New Zealand dollars <NZD=>
struggled against the yen, slipping further from multi-month
highs as sluggish equities prompted funds to take profits.
The euro <EUR=> was on the backfoot, after the cost of
insuring against a Greek default rose and spreads between Greek
and German bond yields widened to near record levels.
European officials and the IMF have agreed to make
available 45 billion euros in loans, but there are questions
about how the package would be implemented. []
Japanese government bond futures rose to their highest
levels in a month, a day after a strong five-year auction and
as traders took cues from a fall in Tokyo shares. []
South Korean government bond prices edged up early on
Friday, with treasury futures extending gains on resumed
foreign buying.
Both benefited from U.S. Treasuries, which rallied as the
weak U.S. labour market figures overshadowed surveys showing
strength in U.S. manufacturing. []
Latest data from fund-tracking firm EPFR showed that
emerging market bond funds set an all-time weekly inflow record
for the week ending April 14, taking in $1.8 billion of new
money.
The combined emerging market equity funds tracked by EPFR
Global showed a net investment inflow for the ninth straight
week in the second week of April, but the $996.6 million they
took in was only a third of the previous week's tally.
Seoul shares edged lower and were down almost 0.9 percent.
"The market has been on a steep upward run since last
month, perhaps a little too much a little too fast. It's now in
technical correction territory," said Lim Dong-min, a market
analyst at KB Investment & Securities.
Shares in Australia retreated 0.5 percent by midday, with
banks giving up morning gains and miners weighed down by
lacklustre base metals prices.
U.S. crude futures <CLc1> slipped under $85 a barrel,
adding to losses the previous day when a firmer dollar and
mixed economic data sapped sentiment.
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