* Europe, Asia shares slip on U.S. growth fears
* Dollar at eight-month low vs yen before U.S. GDP
* Fed official's warning add to fears about the economy
By Emelia Sithole-Matarise
LONDON, July 30 (Reuters) - The dollar fell to an
eight-month low against the yen on Friday while European and
Asian shares slipped on worries U.S. growth data due later in
the day may show the world's biggest economy is losing steam.
The retreat in stocks fed a rally in lower risk euro zone
and U.S. government bond prices, with comments from a Federal
Reserve official adding to fears about the economy.
The second quarter GDP data, due at 1230 GMT, will be
particularly closely watched after a stream of economic data in
the past month flagged a slowdown in the U.S. economy's recovery
from the worst downturn since the 1930s.
The dollar fell to 86.17 yen <JPY=> on trading platform EBS,
its lowest level since November 2009. Stop-loss trades below the
previous low of 86.25 yen were triggered before support emerged
from bids in the 86.20 yen area.
"U.S. economic data is underperforming and keeping pressure
on the dollar," said Lee Hardman, currency economist at Bank of
Tokyo-Mitsubishi UFJ.
"Concerns about the U.S. economy and Fed easing will also
put U.S. yields, which are a key driver for dollar/yen, on the
downside," he said.
Benchmark U.S. 10-year Treasury note yields, which move
inversely to prices, were 1.4 basis points lower at 2.972
percent <US10YT=RR> by 0755 GMT. The yields hit a 15-month low
of 2.855 percent earlier this month on persistent fears the
economy was tipping back into recession.
JAPAN STYLE QUAGMIRE?
St. Louis Federal Reserve Bank President James Bullard, said
on Thursday he was worried about the risks the United States
might fall into a Japan-style quagmire of falling prices and
investment, helping push major U.S. share indexes marginally
lower. []
Word stocks as measured by MSCI <.MIWD00000PUS> were 0.3
percent down as European shares slipped for a third consecutive
session.
The pan-European FTSEurofirst 300 index shed 0.4 percent but
was still on track to record its best monthly gain since March,
helped by upbeat corporate earnings.
"What I see in this market is a fight between macro-economic
data and better-than-expected company results," said Koen De
Leus, economist at KBC Securities.
"We are at a point where the technical picture has improved
considerably, but the problem is that the S&P 500 index doesn't
want to break through the 200-day moving average. It's a
worrying sign and if it stays like this for too long, then we
can expect to go down again."
Japan's Nikkei <> closed down 1.6 percent as signs that
the U.S. recovery was faltering outweighed upbeat domestic
earnings.
Sluggish jobs growth, marked by a 9.5 percent unemployment
rate, is the biggest obstacle to the U.S. economy's recovery
from the most brutal recession since the 1930s.
U.S. equities have been supported by earnings this month,
according to MF Global, with 74.5 percent of S&P 500 components
that have reported earnings in the United States beating
estimates and only 15 percent posting a negative surprise.
"Going forward, those positive surprises to second-quarter
earnings need to transform into third-quarter jobs," said Geoff
Howie, sales and markets strategist at MF Global Markets in
Singapore.
U.S. crude <CLc1> prices retreated, heading for a fourth
consecutive weekly settlement within the $75-$80 range, with
investor focus on a slowing economy and rising U.S. inventories.
(Additional reporting by Tamawa Desai, Atul Prakash and
Vikram S. Subhedar in Hong Kong; Editing by Ruth Pitchford)
