RPT-GLOBAL MARKETS-Asian stocks flat as investors take a breathe

                                
 * Asian shares flat as investors pause for breath
                                
 * Rising dairy prices push Kiwi dollar to 10-month peak
                                
 * Upbeat U.S. economic data pressures Treasuries
 (Repeats to more subscribers)
                                
 By Susan Fenton
                                
 HONG KONG, Aug 5 (Reuters) - Asian stocks steadied near
11-month highs on Wednesday, as investors paused for breath
before more earnings reports, but rising dairy prices pushed
the New Zealand dollar to a 10-month peak.
                                
 Sentiment in Seoul got a slight early lift after former
U.S. President Bill Clinton secured the release of two U.S.
journalists jailed by North Korea. But the market later
shrugged off the news as analysts said it would not ease
tension between South Korea and its neighbour.
                                
 "The market is confined in a very tight range after such a
big rally, though positive news like U.S. housing data
continues to come out," said Soichiro Monji, chief strategist
at Daiwa SB Investments.
                                
 The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> edged up 0.3 percent by midmorning, slowing
down after rallying 40 percent since late April.
                                
 Japan's Nikkei index <.N225> slipped 0.08 percent and
Toyota Motor Corp <7203.T> faced light profit taking, falling 1
percent, after the world's biggest automaker cut its annual
loss forecast but announced a third straight quarterly loss on
Tuesday [ID:nT172427]. Camera maker Nikon <7731.T> was down 1.2
percent ahead of quarterly results later in the day.
                                
 Investors were also reluctant to push the Korean market
much higher after gains for 15 straight sessions and the
benchmark KOSPI index <.KS11> was up just 0.3 percent by
midmorning.
                                
 Surprisingly strong U.S. housing data pushed the Dow Jones
index <.DJI> up 0.4 percent on Tuesday although a sharp drop in
U.S. personal income suggested economic recovery would be slow.
                                
 POLICY SHIFT
                                
 U.S. Treasuries fell on the housing report and put pressure
on South Korean treasury bond futures, with Korean September
futures <KTBc1> dipping 2 ticks in early trade. Japanese
government bonds bounced back though as Japanese stocks
retreated and 10-year September JGB futures <2JGBv1> edged
slightly higher.
                                
 U.S. economic data supported improving risk appetite and
kept the U.S. dollar close to 2009 lows against the euro
<EUR=>.
                                
 The New Zealand dollar <NZD=> briefly touched a 10-month
high at $0.6751 after New Zealand's Fonterra Cooperative Group,
the world's top dairy exporter, reported a strong rebound in
international dairy prices at its latest auction
[ID:nWEL525004].
                                
 The Australian dollar <AUD=> came within sight of a
10-month high on news of a smaller-than-expected trade deficit
in June and after the Reserve Bank of Australia shifted to a
neutral stance from an easing bias at its review on Tuesday.
                                
 Firm commodity prices also supported the Australian
currency. Shanghai copper prices rose more than 1 percent after
London copper prices hit 10-month highs on hopes the U.S.
housing report signalled improving economic fundamentals.
                                
 Economic recovery hopes meanwhile boosted Hong Kong's Hang
Seng Index <.HSI>, which was up 1 percent and shares in Cathay
Pacific <0293.HK>, which were up 2.5 percent ahead of interim
results later on Wednesday.
                                
 Previously one of the world's most profitable airlines, the
carrier's fortunes took a turn for the worse last year amid
volatile oil prices and the global economic downturn
                                
 Oil prices edged higher again on Wednesday after Tuesday's
retreat, with U.S. crude futures heading towards $72 a barrel
after a surprise drawdown in U.S. crude inventories last week.