RPT-GLOBAL MARKETS-Asia shares gain but Nikkei hits 4-mth low

                                
 * Asian shares broadly higher on economic optimism
                                
 * Japanese shares hit 4-month low on dilution, econ worries
                                
 * Dollar falls to seven-week low
                                
 * Gold at a record high
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 By Umesh Desai
                                
 HONG KONG, Nov 25 (Reuters) - Asian stocks climbed on
Wednesday after the Federal Reserve raised U.S. growth
forecasts for 2010 but Japanese shares fell to a four-month low
on worries about capital raisings and government economic
policy.
                                
 The dollar fell to a seven-week low 88.20 yen <JPY=> in
morning Tokyo trade as Japanese exporters sold the U.S.
currency and the greenback also fell against other currencies.
                                
 As confidence in Japan's economy wanes, financial markets
have been reflecting some of that concern with the stock market
trailing rest of the region significantly these past few weeks.
                                
 "International investors have been underweight Japan for
quite some time," said Mark Konyn, who oversees about $11
billion as Asia-Pacific chief executive of RCM, a unit of
Allianz Global Investors.
                                
 "As we went through the election this year there was a
glimmer of hope that reforms combined with improvement on
economic fundamentals would spur investor interest," he said.
                                
 But the yen's rise, worries about capital raisings and
doubts about government economic and fiscal policies have
rattled foreign investors, who have a prominent role to play
given that domestic sellers have been net sellers after a
change in investment strategy by pension funds, analysts say.
                                
 Funds have been cutting stocks holdings and increasing
exposure to foreign holdings to diversify and rebalance their
investments.
                                
 "You put that (foreign investor worries) alongside the
economic disappointments and the incredible amount of capital
raisings going and so you have the Japanese market lagging
significantly," Konyn said.
                                
 The modest recovery in the stock markets in Japan has been
smothered by a wave of share and convertible bond issuance by
companies looking to raise much-needed cash after the financial
crisis.
                                
 The benchmark Nikkei <.N225> fell to a four-month low of
9,366.33 before recovering to trade flat in a broadly higher
Asia boosted by sectors like materials and consumer staples.
                                
 The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> was up 0.33 percent. The Thomson Reuters index
of regional shares <.TRXFLDAXPU> was up 0.87 percent.
                                
 Fund raising worries also dragged down shares in two of
China's top four banks in a broadly steady market.
                                
 Bank of China <3988.HK> fell as much as 4.8 percent to a
three-week low of HK$4.40 and China Construction Bank <0939.HK>
down as much as 2.1 percent, its lowest level in nearly two
weeks.
                                
 Both had notified regulators that they were working on
fundraising proposals to improve their balance sheets after a
lending surge in the first half of the year, a source told
Reuters on Monday [ID:nHKG303608].
                                
 Meanwhile, gold <XAU=> regained its shine after inflation
worries had investors chasing the yellow metal which rose to a
record high of $1,175.55 per ounce.
                                
 Australian stocks and the Aussie dollar were both boosted
by upbeat comments from a top central banker that the country
can look forward to years of brisk economic growth built on
booming resource investment, rapid population growth and rising
household incomes.
                                
 That has revived expectations the central bank will raise
raise interest rates by another 25 basis points to 3.75 percent
next week. Investors are tipping a 78 percent chance
<CSRBA=CSAU> of a rate rise, up from last week's 62 percent.
 (Editing by Kazunori Takada)
 ((umesh.desai@thomsonreuters.com; +852 2843 6935; Reuters
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