* Dollar dips as Bernanke cools U.S. rate rise speculation
* Asian shares flat as investors take a breather
* Japan announces extra stimulus spending but shares ease
* European shares set for flat opening
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 Asian
shares steadied as investors took a breather after recent
gains.
European shares were set to be little changed on opening,
according to financial spreadbetters, while U.S. equity futures
<SPc1> also pointed to a flat start on Wall Street.
The dollar <.DXY> eased 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 recovered early losses 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 <> dipped 0.3 percent after hitting a
six-week closing high on Monday, as investors took profits on
shares of exporters. Shipping company stocks also lost ground
after the Baltic Exchange's main sea freight index <.BADI>,
which tracks rates to ship dry commodities, fell for the first
time in four days.
Markets were little fazed by news that the Japanese
government had finalised a 7.2 trillion yen ($80.6 billion)
stimulus package, slightly more than its original plan.
[]
"The stimulus news had been mostly factored in as the
increase was almost due to pressure from the market," said
Masaru Hamasaki, a senior strategist at Toyota Asset Management
in Japan.
Tokyo also said it was closely watching exchange rate
movements as the yen <JPY=> edged up to 88.94 to the dollar
from 89.53 late in New York trade.
DUBAI SHARES SKID
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> was virtually unchanged.
Investors are becoming more cautious as the year-end draws
near and the price of risk is rising, according to the VIX fear
factor index <.VIX>, which rose 4 percent overnight.
Asian investors will be especially careful to ensure they
hold on to gains as the MSCI Asia ex-Japan index has rallied 66
percent this year, analysts say.
Hong Kong's Hang Seng Index <> was down 0.6 percent and
banking giant HSBC Holdings <0005.HK><HSBA.L> tumbled 1.4
percent on concern about its exposure to debt-laden Dubai World
[] whose request to delay payment on $26 billion in
debt has shaken global markets in the past few weeks.
The Middle East conglomerate is talking with HSBC and other
creditors this week and a Dubai newspaper said on Tuesday that
they had set a new date for $3.5 million in debts maturing on
Dec. 14. []
Dubai's leading share index <> skidded 5.5 percent in
early trade to a 21-week low on continued nervousness about
financial stability.
Gold <XAU=> rebounded to $1,160 an ounce from $1,157 at the
New York close as the dollar lost ground, while oil prices
<CLc1> edged above $74 a barrel after sliding 2 percent on
Monday, but continued to be restrained by concern about the
outlook for global demand, analysts said.
U.S. President Barack Obama is due to make a speech at
1625 GMT when he will lay out proposals to combat double-digit
unemployment, although they are unlikely to move markets,
analysts said.
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 as high as
$0.9165 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 Kazunori Takada)
(susan.fenton@thomsonreuters.com; +852 2843 6367; Reuters
Messaging: susan.fenton.thomsonreuters.com@reuters.net)
