* Dollar dips as Bernanke cools U.S. rate rise speculation
* Asia shares falter on renewed concern on economic outlook
* Japan announces extra stimulus spending but shares fall
By Susan Fenton
HONG KONG, Dec 8 (Reuters) - The dollar dipped on Tuesday
after Federal Reserve Chairman Ben Bernanke dampened
speculation of an early U.S. interest rate rise, while shares
faltered on renewed concern about the strength of the global
recovery.
The dollar <.DXY> edged down 0.2 percent against a basket
of major currencies after Bernanke said the U.S. economy faced
"formidable headwinds" including tight credit conditions,
cooling expectations for an early rate rise which were prompted
by promising U.S. jobs data on Friday.
The Fed was sticking to a pledge to keep rates at
exceptionally low levels for an "extended period", Bernanke
said. []
Asian shares weakened as investors were both relieved that
the United States was not about to accelerate an upturn in the
global interest rate cycle, but concerned about the outlook for
the world's biggest economy and Asia's leading export market.
Japan's Nikkei <> slid 0.5 percent after hitting a
six-week closing high on Monday, as investors took profits on
shares of exporters and as trading house stocks lost ground
after metal prices fell on Monday.
"The selling is a combination of the slightly stronger yen
and the speed with which the Nikkei rose over the last six
days, making it only natural for the market to take a bit of a
breather today," said Takashi Ushio, head of the investment
strategy division at Marusan Securities in Tokyo.
Markets were little fazed by news that the government had
finalized a 7.2 trillion yen ($80.6 billion) stimulus package,
slightly more than its original plan. []
The government also said it was closely watching exchange
rate movements as the yen <JPY=> edged up to 89.05 to the
dollar from 89.53 late in New York trade.
A lacklustre performance by Wall Street also made Asian
investors cautious as the Dow Jones <> gave up early gains
after Bernanke's comments and ended flat. []
U.S. President Barack Obama is due to lay out proposals to
combat double-digit unemployment at a speech scheduled for 1625
GMT, although they are unlikely to move markets, analysts said.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> was down 0.3 percent while the Thomson Reuters
index of regional shares <.TRXFLDAXPU> was unchanged.
Hong Kong's Hang Seng Index <> fell 0.8 percent but
banking giant HSBC Holdings <0005.HK><HSBA.L> dropped 1.5
percent ahead of a meeting between debt-laden Dubai World
[] and its key creditors, including HSBC, on Tuesday.
The meeting will discuss the Middle East conglomerate's
request to delay payment on $26 billion in debt, which has
shaken global markets in the past few weeks.
GOLD REBOUNDS
Gold <XAU=> rebounded to $1,163 an ounce from $1,157 at the
New York close as the dollar lost ground, while oil prices
<CLc1> were steady at $74 a barrel after sliding 2 percent on
Monday.
Asian currencies, hurt overnight along with other riskier
currencies by news that Standard & Poor's had put Greece on
negative credit watch, rebounded as the dollar slipped on
receding U.S. rate rise expectations.
The Australian dollar <AUD=D4> bounced back to $0.9162 from
an overnight low of $0.9054.
"It is back to the status quo," said Richard Grace, chief
currency strategist at Commonwealth Bank of Australia in
Sydney.
"This means U.S. yields are likely to stay fairly
unattractive for some period and that should give a boost to
currencies like the Aussie."
The Korean won <KRW=>, however, weakened against the dollar
as investors remained wary of possible intervention by the
authorities.
(Additional reporting by Anirban Nag in SYDNEY and Elaine Lies
in TOKYO; Editing by Kim Coghill)
(susan.fenton@thomsonreuters.com; +852 2843 6367; Reuters
Messaging: susan.fenton.thomsonreuters.com@reuters.net)
