* Aussie rebounds from one-month low struck after elections
* Japan eyes PM-BOJ meeting which seen focusing on yen
* Nikkei seen under pressure if no meeting held -analysts
By Umesh Desai
HONG KONG, Aug 23 (Reuters) - Japanese shares extended
losses on Monday amid worries a strong yen would derail the
fragile economic recovery, while the Australian dollar
recovered after falling to a one-month low on inconclusive
weekend elections.
Broad investor concerns about the global economic recovery
are weighing on regional stocks which fluctuated through
positive and negative territory following a string of weak
economic data releases from the United States last week.
Political uncertainty pulled the Australian dollar down
initially to a one month trough of $0.8833 <AUD=D4> but the
unit made a quick rebound to trade at $0.8905, down 0.4
percent.
Australian stocks also rebounded after an early fall to
trade flat, led almost entirely by a rally in miners on
expectations that Prime Minister Julia Gillard would fail to
form a government, spelling the end of her 30 percent tax on
major iron ore and coal mines. The conservatives have vowed to
scrap the mining tax. []
The reversals in the Aussie and Australian stocks also
followed a media report the country's largest brewer Foster's
Group <FGL.AX> was selling its beer operations to SABMiller
<SAB.L><SABJ.J> for about 7 billion pounds ($10.9 billion).
Foster's shares rose as much as 6.5 percent. []
Investors likely face a week's wait before they know who
will form a national government and how independents will sway
key policies like the mining tax and a planned broadband
network.
"There is the mining tax and the broadband issue but there
are not too many economic differences," said Simon Burge at ATI
Asset Management which oversees A$500 million. "But with no
party having a clear majority it makes it hard for them to get
any of their mandates through."
YEN STRENGTH EYED
Japan's benchmark Nikkei <> was down 0.4 percent
adding to Friday's 2 percent fall as corporate performance
jitters grew in the wake of the yen's strength against the
dollar.
"Governments around the world are allowing their currencies
to weaken, and if Japan doesn't do anything about the strength
in the yen it could appreciate further and that would put
pressure on Japanese stocks," said Masahiko Sato, an executive
director at Nomura Securities' equity marketing department.
Investors are focused on whether central bank Governor
Masaaki Shirakawa and Prime Minister Naoto Kan will meet to
discuss any official action in the face of the yen's strength.
News that Kan and Shirakawa talked over the phone on Monday
about the currency and the economy and agreed to work closely,
which came during the mid-day break, was unlikely to have a big
impact as it remained undecided whether the two will hold a
meeting. []
The dollar was down 0.3 percent at 85.35 yen <JPY=>. The
U.S. currency fell as low as 84.72 yen earlier this month, its
lowest since July 1995.
Investors expect Kan to pressure the central bank for
action in the face of the yen's strength, but Jiji news agency
reported the government is considering postponing the meeting,
which had been expected on Monday, to avoid giving the
impression that it is intervening in the BOJ's policy
decisions. []
Meanwhile, the doubts about the global economic recovery
weighed on investor sentiment.
"A growing trend seems to be that signs of a weak global
economic recovery are prompting some funds to close, and
cash-out moves as a result of that are weighing on stocks. That
money is likely flowing into U.S. bonds and JGBs," said Hajime
Nakajima, deputy general manager at Cosmo Securities.
The MSCI index of Asia Pacific ex-Japan stocks
<.MIAPJ0000PUS> eked out gains, rising 0.3 percent and hauled
up by advances in sectors such as resources <.MIAPJMT00PUS> and
technology <.MIAPJIT00PUS>.
Oil rebounded to above $74 a barrel but stayed close to six
week lows amid concerns about a global economic recovery.
(Additional reporting by Aiko Hayashi in TOKYO; Editing by
David Fox)
