* Shanghai stocks dip then climb, keep markets on edge
* Mixed U.S. economic data also making investors wary
* Nikkei down as automakers fall
* Yen gains as investors go on defensive
By Charlotte Cooper
TOKYO, Aug 21 (Reuters) - Most Asian stock markets edged
higher on Friday, keeping a wary eye on volatile Chinese
shares, while currency traders went on the defensive after a
wild see-saw week and mixed U.S. economic data, bidding up the
safe-haven yen.
Markets took a deep breath as the Shanghai index <>
opened lower after jumping 4.5 percent on Thursday, but Chinese
shares soon moved into the black and were up 1 percent by late
morning.
The index has lost about 15 percent in just two weeks,
unnerving global investors who are trying to gauge how China's
revival is playing out while wrestling with continued mixed
signals on recovery prospects in major Western economies.
"Investor sentiment has not yet fully recovered despite
yesterday's rebound," said analyst Zhou Lin at Huatai
Securities in Nanjing. "So they will watch the market's
performance as well as economic fundamentals to decide on their
investments."
A government think-tank said China's gross domestic product
would grow about 8.5 percent in the third quarter from a year
earlier, picking up pace from the second quarter's 7.9 percent.
[].
Modest gains in U.S. stocks overnight, buoyed by positive
manufacturing data and Thursday's rebound in Chinese stocks,
also lent some support to most Asian markets, offseting
disappointment that U.S. weekly jobless claims increased for a
second week. []
As Shanghai moved higher, the MSCI index of Asia-Pacific
shares outside Japan <.MIAPJ0000PUS> pared early losses to
stand little changed by 0316 GMT.
Most markets in the index, however, were slightly higher
with the exception of Australia <>, which fell 1.5 percent
after a cautious outlook on loan demand from major lender
Westpac Banking Corp <WBC.AX>. {ID:nSYD166512]
In Japan, the Nikkei average <> fell 1.3 percent as
automakers fell ahead of the end of the U.S. "cash for
clunkers" programme on Monday. The programme has boosted U.S.
car sales.
Shares in the world's biggest automaker, Toyota Motor
<7203.T>, shed 2.7 percent.
YEN RISES
The yen rose broadly against other major currencies,
particularly those leveraged to global growth, as investors
fretted about the potential for further weakness in Chinese
shares and shied away from riskier investments.
The dollar fell 0.3 percent to 93.93 yen <JPY=>,
approaching this week's one-month low of 93.66 yen as Japanese
exporters sold, while the euro also eased and the Australian
dollar fell 0.7 percent to 77.74 yen <AUDJPY=R>.
Sentiment towards the Australian dollar was hurt after
ratings agency Moody's Investors Service repeated its concerns
about the deteriorating financial position of many of
Australia's states and said downgrades could not be ruled out.
[]
U.S. crude futures initially edged up to a seven-week high
above $73 a barrel <CLc1> but then slipped back below the
$73.00 mark.
Japanese government bonds advanced, with futures <2JGBv1>
hitting a five-month high after gains in U.S. Treasury debt
prices in New York and the drop in Tokyo stocks.
Treasury futures <TYv1> rose slightly in Asian trade.
(Editing by Kim Coghill)
(Additional reporting by Jungyoun Park in Seoul, Elaine Lies
and Masayuki Kitano in Tokyo)
