* Fed Chairman says U.S. outlook "unusually uncertain"
* Doesn't specify any policy action
* Nikkei index down 0.7 pct, heading for fifth straight
fall
* Yen gains broadly on risk aversion
* Treasuries steady after U.S. rally
(Repeats item to more subscribers)
By Kevin Plumberg
HONG KONG, July 22 (Reuters) - Asian stocks slipped and the
yen rose on Thursday after comments by the head of the U.S.
Federal Reserve added to concern about the U.S. economy and
left investors uneasy ahead of European bank stress tests.
The results of the European Union examination of banks are
due on Friday and are expected to show generally positive
results for Greece, Italy and Ireland and a few failures in
Portugal and Spain. []
However, do not expect risk taking to bounce back for long
if at all, given how Europe's fundamental backdrop remains
relatively grim, especially with fiscal austerity the norm,
U.S. fund managers and analysts said. []
Ben Bernanke, the chairman of the Federal Reserve, offered
somewhat downbeat comments in Congressional testimony on
Wednesday.
Although he said policymakers expected growth to be
sustained, he described the outlook as "unusually uncertain"
and didn't offer any specific actions to deal with it.
[]
"Federal Reserve Chairman Bernanke's assessment of the U.S.
outlook would appear to be similar to driving in the fog --
bleak and uncertain," Standard Chartered analysts said in a
note.
"The fading fiscal stimulus and inventory restocking cycle
will provide less impetus to the recovery going forward than in
recent quarters."
* Japan's Nikkei share average <> dropped 0.7 percent,
on course for a fifth straight session of losses. Short-term
indicators pointed to oversold conditions.
* The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> edged down 0.4 percent, with healthcare and
financial stocks the main drags. Some sectors sensitive to
business cycles were actually outperforming, suggesting some
investors were taking advantage of the uncertainty to scoop up
some bargains.
* However, the technology sector was weighed down after
South Korea's Hynix Semiconductor, the world's No. 2 memory
chip maker, said DRAM prices would fall in the current quarter.
Hynix shares <000660.KS> fell 2.8 percent.
* The yen rose across the board, benefiting from the
increased risk aversion in financial markets. The U.S. dollar
fell 0.3 percent to 86.68 yen <JPY=>, closing in on the
7-1/2-month low hit last week of 86.27.
* U.S. Treasuries were steady after rallying overnight on
Bernanke's comments. The 2-year yield <US2YT=RR> was near at a
record low of 0.56 percent.
* The collapse in short maturity rates has caused the U.S.
yield curve to flatten by 39 basis points so far this year.
* U.S. crude futures stood little changed at $76.59 a
barrel <CLc1> after dropping 1.3 percent on Wednesday on
Bernanke's comments.
(Editing by Neil Fullick)
