* Asian stocks broadly lower, Nikkei falls 1.1 pct
* European shares dip in early trade on profit taking
* Dollar firmer on WSJ report on easier Fed bond buying
* BOJ easing talk also buttresses U.S. currency
By Ron Popeski
SINGAPORE, Sept 28 (Reuters) - Shares fell in Asia and
Europe on Tuesday while the struggling dollar was buoyed by a
report that the Federal Reserve was weighing a smaller
bond-buying programme than its previous asset purchase scheme.
Suggestions that Japan's central bank may also ease monetary
policy weighed on the yen, but currency markets remained
anxious about the prospects for new Japanese intervention, and
gold held near record highs.
Leading European stocks <> fell 0.7 percent in early
trade as investors took profits after four weeks of gains and
grew increasingly wary of European debt challenges,
particularly in Ireland and Portugal.
S&P futures <SPc1> slipped 0.3 percent, pointing to a
weaker opening on Wall Street as traders awaited a slew of
economic data including readings on U.S. consumer confidence
and retail sales.
Markets have drawn strength from recent U.S. data showing
the economy was not sliding back into recession as some
investors had feared, though growth remains sluggish and
uneven.
The dollar index against a basket of other major currencies
<.DXY> rose 0.5 percent, aided by a Wall Street Journal report
that Fed officials were considering a more open-ended,
smaller-scale bond buying programme than was the case in 2009.
The report also prompted a dip in U.S. Treasuries.
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"The recent (stock market) rally calls for a bit of
volatility. We are resilient as the mood globally is still
optimistic," said Shane Oliver, head of investment strategy at
AMP Capital Investors in Australia.
Japan's Nikkei average <> fell 1.1 percent as the
deadline passed for investors to receive dividends on Tokyo
stocks for the financial half year.
The MSCI index of Asian stocks outside of Japan
<.MIAPJ0000PUS> sagged 0.5 percent.
Tokyo stocks have risen only some 1.6 percent this quarter
as major exporters were weighed down by the yen's surge to near
15-year highs against the dollar.
The MSCI ex-Japan index has risen nearly 10 percent in
September, while the S&P 500 has gained more than 10 percent,
prompting some analysts to predict more profit taking in coming
sessions.
DOLLAR GETS A REPRIEVE
The dollar was trading at 84.20 yen at 0640 GMT, little
changed from the New York close but up from levels around 84.11
-- its weakest point since Tokyo's heavy intervention two weeks
ago to push its currency lower.
Sources said the Bank of Japan was considering whether to
ease monetary policy further, though it could delay action
pending a consensus on how to keep economic recovery on track.
Talk of easing had an effect as did the possibility of
intervention.
"The market consensus is now that there won't be endless
yen strengthening, that if the dollar falls below 84 yen
authorities are likely to intervene," said Kenichi Hirano,
operating officer at Tachibana Securities.
The dollar index hit a seven-month trough of 79.19 on
Monday, before climbing back in Asia.
Still, many traders believed the dollar remains locked in a
downtrend as any future quantitative easing by the Fed would
probably still be more aggressive than that of other central
banks.
A trader at a Japanese brokerage house said currencies like
the euro and Australian dollar "have rallied so much so far
this month that their momentum is waning a little bit. But that
is just a short-term thing."
The Australian dollar <AUD=> edged down from near two-year
highs at $0.9584, while the euro stood at $1.3438, away from
Monday's peak of $1.3507 following Moody's decision to cut its
ratings on some lower-grade debt of Ireland's Anglo Irish Bank.
The downgrade rattled markets, further jolted by a pledge
by the opposition to seek an early election. The rising cost of
rescuing the bank, nationalised during the 2009 banking crisis,
has heaped pressure on Ireland's already strained state
finances.
Gold dipped after hitting a record high of $1,300 an ounce
in the previous session as a rebound in the dollar prompted
speculators to lock in gains.
Crude oil futures <CLc1> fell 90 cents to $75.62 a barrel
ahead of U.S. reports expected to show fuel stockpiles rose in
the world's top oil-consuming nation last week.
(Editing by Tomasz Janowski & Kim Coghill)
