* Japan shares bounce back; Europe, U.S. lower
* Yen neared record high against dollar
* Bahrain, Libya concern boosts oil price
(Updates with New York open, changes dateline)
By Al Yoon and Jeremy Gaunt
NEW YORK/LONDON, March 16 (Reuters) - European and U.S.
shares fell on Wednesday as the nuclear crisis in Japan raised
concern of slower growth worldwide, though Japanese stocks
rebounded as some investors saw value after a steep sell-off.
Western markets also struggled with trouble in Bahrain and
concerns about euro-zone debt.
Wall Street opened lower as the price of oil climbed. Brent
crude <LCOc1> rose 2 percent to $110.65 a barrel after Bahraini
security forces cracked down on protesters, with fighting in
Libya simmering in the background.
"There is a perfect storm of uncertainty right now in terms
of global growth, and markets are taking that into account,"
said Oliver Pursche, president at Gary Goldberg Financial
Services in Suffern, New York.
Euro-zone debt worries also surfaced, pressuring the euro.
Portugal's 12-month borrowing costs rose at a bill auction
after a two-notch rating downgrade by Moody's, showing the
debt-laden country remains under pressure despite a euro zone
deal to tackle the debt crisis.
Some sectors of financial markets were readjusting after a
worldwide battering of riskier assets following the earthquake,
tsunami and nuclear disasters that have hit Japan, the world's
third largest economy.
"It is too early to say if we are facing a trend reversal
or just an interruption of the negative trend, but at least it
is a stabilization," said Enid Omerovic, analyst at
Frankfurt-based Close Brothers Seydler.
MSCI's all-country world stock index <.MIWD00000PUS> was up
half a percent. It fell as much as 4.5 percent over the past
three sessions on the back of a near 20-percent, two-session
dive on Japan's Nikkei average <>.
Wednesday's recovery was mainly boosted by Asia stocks,
with the Nikkei regaining 5.7 percent. It remained down more
than 11 percent for the year.
There was widespread belief that the post-earthquake
sell-off had gone too far, too quickly, but there was still
concern that the nuclear reactor crisis was unresolved.
"Uncertainty in the Fukushima nuclear power plant is
clearly making market participants very nervous," said Kazuhiro
Takahashi, general manager at Daiwa Securities Capital Markets
in Tokyo.
The Dow Jones industrial average <> was down 50.86
points, or 0.43 percent, at 11,804.56. The Standard & Poor's
500 Index <.SPX> was down 4.22 points, or 0.33 percent, at
1,277.65. The Nasdaq Composite Index <> was down 6.37
points, or 0.24 percent, at 2,660.96.
Europe's Eurofirst 300 <> was flat. Banks led
decliners after the Moody's downgrade of Portuguese debt
overnight.
U.S. and European markets also weakened after the U.S.
government reported its producer price index surged at its
fastest pace in more than 1-1/2 years in February.
YEN SLIPS
The yen steadied around a four-month high versus the
dollar.
Japan's nuclear crisis was seen as triggering more
safe-haven yen demand, raising the prospect of intervention to
stem big gains.
The dollar <JPY=> traded lower by 0.2 percent, near a
four-month low of 80.60 yen hit on Tuesday.
"We wouldn't talk about a recovery in dollar/yen yet," said
Lutz Karpowitz, FX strategist at Commerzbank in Frankfurt. A
drop under 80 yen isn't expected, however, as authorities are
likely to take steps to prevent a steeper yen rise, he added.
The dollar index <.DXY> against major currencies rose 0.39
percent, while the euro <EUR=> slipped 0.53 percent to $1.3922,
having failed to break above a four-month high of $1.4036 hit
earlier this month.
Portuguese bonds underperformed following the ratings cut
and yields rose at the sale of 1-year paper.
Spot gold prices <XAU=> rose $6.40, or 0.46 percent, to
$1400.30.
(Additional reporting by Akiko Takeda, Antoni Slodkowski,
Naomi Tajitsu, Kirsten Donovan, Atul Prakash and Harro ten
Wolde; Editing by Padraic Cassidy)
