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* BOJ governor says positive business cycle starting
* Dollar gains some respite as equities fall
* Commodities dip as investors digest mixed U.S. econ data
By Susan Fenton
HONG KONG, Sept 18 (Reuters) - Asian stocks retreated from
13-month highs on Friday and commodity prices dipped after data
giving a conflicting picture about the strength of the U.S.
recovery stopped investors from extending this week's rally.
The Bank of Japan deputy governor, Hirohide Yamaguchi, said
a positive business cycle was starting and signalled the
central bank could soon withdraw emergency support for
corporate funding [].
But Japanese stocks fell as investors sold shares of
exporters that had run-up sharply while there was also wariness
about taking new positions ahead of public holidays early next
week. The Nikkei index <> was down 1.2 percent, breaking a
three-day rally.
The dollar benefited as investors globally became more
cautious. It held above one-year lows reached on Thursday
against a basket of currencies <.DXY>, although analysts said
its respite could be temporary.
"We are seeing a bit of a pullback but the broader U.S.
dollar weakness remains intact as it turns to be the currency
for carry trades," said Jonathan Cavenagh, currency strategist
at Westpac in Australia.
Investors across the region stood back after Asian equities
hit their highest level in 13 months on Thursday. While there
is growing confidence the global economy is on an uptrend there
is uncertainty about the strength of that recovery, analysts
said.
Data on Thursday showed U.S. housing starts hit their
highest level last month since November, but a rise in the
number of Americans drawing long-term unemployment compensation
tempered optimism for a sharp rebound in the world's biggest
economy, and the Dow Jones <> slipped 0.08 percent.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> was down 0.7 percent on Friday morning, after
surging 80 percent since mid-March.
QANTAS BUCKS MARKET
Japanese government bond futures rebounded as Tokyo stocks
fell, but gains were limited ahead of the long holiday.
December 10-year JGB futures <2JGBv1> rose 0.10 point to
138.69.
Gold <XAU> was holding up, trading at $1,011.95 an ounce,
close to its New York close at $1,011.45 after hitting an
18-month high of $1,023.85 on Thursday. Seen as a hedge against
potential inflation, gold is likely to stay firm and many
market participants still expect it to break through its record
high of $1,030.80.
Otherwise, commodity <.CRB> prices slipped on uncertainty
about the strength of the global economic recovery and the oil
price <CLc1> edged down 47 cents to $72 a barrel.
Weaker commodity markets put pressure on shares of
Australian resources companies, such as mining giant BHP
Billiton <BHP.AX> which fell 2.4 percent, and helped push the
Aussie dollar <AUD=> below Thursday's one-year high.
However, shares in Qantas Airways <QAN.AX> bucked the
market, jumping 3.4 percent after positive comments on the
carrier from broker RBS.
Shares across Greater China were slightly weaker on concern
that recent gains may be overdone.
In Taiwan, the world's top contract chip maker TSMC
<2330.TW>, and rival UMC <2303.TW>, came under pressure after
the island's new cabinet said it would continue to restrict
investments by the chip foundry sector in China. []
TSMC dipped 0.3 percent while UMC fell 1.3 percent.
(Additional reporting by Anirban Nag in Sydney, Editing by
Dean Yates)
