* Shares pare gains on worry about U.S. stimulus, bank plan
* Media reports of changes in 'bad bank' plan weigh
* Euro falls over 1 pct after report on Russian private
debt
(Repeats to more subscribers)
By Elaine Lies
TOKYO, Feb 10 (Reuters) - Asian stocks pared gains on
Tuesday as doubts grew about U.S. plans to create a bank to
soak up toxic debts, while the euro fell over 1 percent against
the yen and the dollar on a report that Russia is set to
request a delay in repaying debt.
Russia will request negotiations with European and other
foreign banks to postpone repayment on up to $400 billion of
its private-sector debt, Japan's Nikkei business daily said on
Tuesday. []
The report, which could not be immediately confirmed, sent
the euro tumbling 1.2 percent to $1.2849 <EUR=> and 1.6 percent
to 117.08 yen <EURJPY=> before it clawed slightly higher again.
U.S. stock futures initially fell over 1 percent after
CNBC, quoting what it said was a source familiar with the plan,
initially reported that the U.S. Treasury has dropped plans to
establish a "bad bank" to buy distressed assets from commercial
banks as part of a financial rescue package.
CNBC later said the plan would include a new form of "bad
bank", using public and private funds. []
While such a plan would remove soured assets which are
contaminating banks' balance sheets, freeing them up to lend
again, the expected use of taxpayers' money and fears of
further losses have made the issue highly politically charged
for President Barack Obama.
"Even if the 'bad bank' won't be set up, some sort of
entity to deal with problem assets will likely be established
in the end," said Masaru Hamasaki, a senior strategist at
Toyota Asset Management.
"If that entity proves to be effective, the market will
gradually evaluate it favourably."
Wall Street finished flat on Monday as traders' anxiety
grew after the announcement of the bank plan was postponed by
one day until 11 a.m. (1600 GMT) on Tuesday. The nervousness
helped erase early gains in Asian markets. []
An $838 billion economic stimulus bill passed a key
procedural hurdle in the U.S. Senate on Monday, paving the way
for the chamber to pass the bill on Tuesday. But then final
negotiations must begin with the House of Representatives --
whose own bill is priced at $819 billion -- on a compromise
bill. []
Dow Jones industrial stock futures <DJc1> were down 0.9
percent and S&P stock futures <SPc1> had lost 1.1 percent, a
sign that Wall Street may fall.
Japan's Nikkei share average <> edged up 0.2 percent,
paring earlier gains that saw it rise over 1 percent.
Nissan Motor Co <7201.T> surged 7.3 percent after it
announced drastic steps on Monday to cope with the recession,
saying it would cut 20,000 jobs. It joined a growing list of
automakers warning of red ink this year. []
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> fell 0.9 percent.
Hong Kong's Hang Seng <> was up 0.3 percent after
extending gains on Monday to its longest rally in two months,
while shares on the Shanghai bourse <SSEC.> were flat amid
questions about the sustainability of a recent bull run in
Chinese markets.
RUSSIA WOES
The media report on Russia quoted a Russian banking
official as saying up to $400 billion in debt was at stake.
A proposal for postponing repayment has been submitted to
the government and some foreign banks have already agreed to
start negotiations, the Nikkei said.
The Australian dollar <AUD=> retreated from three-week
highs struck offshore after reports on the U.S. "bad bank" plan
suggested investors may end up disappointed, with a gloomy
business confidence survey also weighing. []
The yield on the benchmark 10-year U.S. Treasury note edged
up slightly to 2.99916 percent <US10YT=RR> after U.S. Treasury
debt prices fell on Monday, taking benchmark yields to their
highest levels in over two months.
Japanese government bond futures <2JGBv1> edged down 0.1
percent to 138.47.
Oil prices rose to near $40 a barrel, paring the previous
day's 1.5 percent decline, after getting a boost from OPEC talk
of more production cuts and hopes that a U.S. economic package
would be passed by Congress this week. <CLc1> []
Gold eased, extending the previous day's fall of almost 2
percent. The yellow metal <XAU=> was trading at $894.40 an
ounce at 0024 GMT, down $0.60 from New York's notional close on
Monday.
(Additional reporting by Aiko Hayashi in Tokyo)
