* Japan shares rise, bucking weakness across rest of Asia
* Dollar loses ground to higher-yielding currencies
* Hong Kong's biggest IPO this year slumps 13 pct
* European, US futures indicate weak start
By Susan Fenton
HONG KONG, Sept 24 (Reuters) - Asian shares outside Japan
fell on Thursday, mirroring investor caution in the United
States, while the dollar lost ground to higher-yielding
currencies after the Fed pledged to keep interest rates low.
European stock futures <STXEc1> were down 0.5 percent while
U.S. equity futures <SPc1> were down 0.08 percent.
Japan's benchmark Nikkei index <> jumped 1.7 percent
after a three-day holiday break, reflecting gains made in the
rest of the region at the start of the week.
Investors otherwise were taking a breather and the MSCI
index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> was down 1 percent. That, however, marked only
a slight pullback given the index has nearly doubled since
early March when markets began factoring in an economic
improvement.
The Thomson Reuters index of regional stocks <.TRXFLDAXPU>
was down around 1.3 percent.
Shares in Korea fell 1 percent with some concern that a
strengthening Korean won <KRW=> could hurt export
competitiveness.
In Hong Kong, the Hang Seng Index <> shed nearly 3
percent by midday and new listing Metallurgical Corp of China
<1618.HK>, a Chinese engineering company and the market's
biggest IPO so far this year, slid 13 percent below its issue
price, as investors fretted about the outlook for China's steel
industry. []
The dollar was up 0.3 percent against a basket of
currencies <.DXY> but lost ground against the higher yielding
Australian dollar <AUD=D4> and the New Zealand dollar <NZD=>
after the Fed reiterated a pledge to keep interest rates very
low for a long period. [] The Fed also said that
U.S. economic activity was picking up but did not surprise
investors.
"The Fed didn't make much of a change to factors
surrounding the dollar. That means the overall dollar trend
stays downwards," said Jun Kato, senior chief analyst at
Shinkin Central Bank Research Institute in Tokyo.
The Aussie dollar rose to $0.8734, nearing its 13-month
high of $0.8790 while the Kiwi was firm but off 14-month highs
reached on Wednesday after data showed New Zealand had pulled
out of recession.
JAL PLUNGES
Economic recovery in Japan meanwhile is likely to take time
as data on Thursday showed a slump in Japanese exports last
month [] although that did not deter stock
investors.
Electronics maker Sony Corp <6758.T> surged 3 percent after
the company said sales of the PlayStation 3 video game console
jumped after a price cut last month [].
Japan Airlines <9205.T> bucked the trend, though, plunging
18 percent to a record low after sources said it might be
broken up and public broadcaster NHK reported the airline may
seek a public bail-out. [][]
Markets will be eying a two-day G20 summit in Pittsburgh
starting on Thursday for further clues on the health of the
global economy and when governments might start rolling back
support measures for economic growth.
Japanese and Korean government bonds followed U.S.
Treasuries higher on the Fed's dovish stance although gains in
Japanese treasuries were capped by a rising equity market.
December 10-year Japanese government bond futures <2JGBv1>
rose 0.27 point to 138.82.
Gold <XAU=> bounced back to around $1,010 an ounce, after
sliding to a New York close at $1,007.05. It has been supported
by underlying weakness in the U.S. dollar and is now about 1
percent off an 18-month high reached last Thursday at
$1,023.85.
Oil prices <CLc1> remained weak, sliding 0.7 percent to
$68.5 after shedding nearly 4 percent on Wednesday when a jump
in stockpiles raised concerns about the strength of demand.
(Additional reporting by Rika Otsuka in Tokyo; editing by
Jeremy Laurence)
