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* Asia shares fall, mkts brace for U.S. non-farm payrolls
* Dollar firm, favoured over high-yield currencies
* U.S. 10-yr bond yields hit lowest level since May
By Susan Fenton
HONG KONG, Oct 2 (Reuters) - Asian shares fell on Friday as
disappointing U.S. manufacturing data raised concern that its
economic recovery may not be as fast as thought, while the
dollar remained firm as investors booked profits on gains in
higher-yielding currencies.
European stock futures <STXEc1> were down 0.9 percent while
U.S. equity futures <SPc1> were 0.3 percent lower.
Investors were nervous ahead of U.S. non-farm payrolls, due
at 1230 GMT, fearing more disappointing news after an Institute
for Supply Management report showed manufacturing growth was
slower-than-expected in September. []
Shares in Japan <> skidded 2.5 percent with carmakers
including Toyota and Nissan hurt by a slump in September U.S.
car sales.
Worries about U.S. economic data overshadowed a surprise
drop in Japan's unemployment rate and helped push five-year
Japanese government bonds yields to a four-year low.
[]
U.S. 10-year bond yields fell to 3.15 percent in Asia,
their lowest level since May on the back of the weak data.
Trade across Asia was quieter than usual with markets in
China, India and South Korea closed for public holidays.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> fell 1.6 percent, although it is still up 56
percent this year, while the Thomson Reuters index of regional
shares <.TRXFLDAXPU> was down 1.4 percent.
"STONE COLD" RECOVERY
If U.S. non-farm payrolls data shows more than an expected
180,000 job losses, it could renew fears about the strength of
the economic recovery and bolster the dollar as a safe haven,
traders said.
The dollar remained firm after the disappointing
manufacturing data, which prompted investors to book profits on
the higher-yielding Australian dollar <AUD=> and the New
Zealand dollar <NZD=>.
The euro <EUR=> regained some ground to $1.4539, after
hitting a three-week low at $1.4502 in early Asian trade.
David Watt, senior currency strategist, at RBC Capital in
Australia said the U.S. manufacturing index played to the theme
that, without stimulus from governments and policymakers, "the
formerly red-hot recovery is going stone cold".
Wal-Mart Stores Inc <WMT.N> said it expected a slow
recovery both in the United States and Asia.
"Our business in the U.S. is very challenging right now ...
some of the recent economic news is more pessimistic than
expected," Wal-Mart Chairman Rob Walton told Reuters in an
interview on Friday []
"We think Asia probably will lead the recovery and we
certainly see a recovery occurring in the not too distant
future, but it will be slow I believe."
Shares of Japanese car makers came under pressure after
data showed U.S. car sales slumped 23 percent last month after
the end of the government's "cash for clunkers" programme,
which had briefly boosted vehicle sales. []
Toyota Motor <7203.T> and Honda Motor <7267.T> shed more
than 3 percent and concerns about the strength of the yen
<JPY=> added pressure as Toyota President Akio Toyoda said it
would be difficult for the auto giant to return to profit while
the dollar was weak. []
In Hong Kong, shares were down 2.3 percent, and new listing
Glorious Property Holdings <0845.HK> skidded 20 percent in the
morning of its debut -- the latest IPO in the city to be hit by
dwindling appetite for new issues amid a flurry of new
offerings. []
Australia's benchmark S&P/ASX 200 index <> fell 1.8
percent as investors reassessed recent gains. Mining giants BHP
Billiton <BHP.AX> and Rio Tinto <RIO.AX> lost close to 3
percent after metal and gold prices fell overnight on concerns
about weak demand.
Gold <XAU> edged back above $1,000 an ounce by Friday
afternoon.
U.S. crude oil futures <CLc1> fell about 1 percent towards
$70 a barrel after Washington said talks between Iran and six
major world powers over Tehran's nuclear programme were
productive and opened the door to better ties. []
(Additional reporting by Harry Suhartono in SINGAPORE and
Anirban Nag in SYDNEY; Editing by Jan Dahinten)
