* Asian shares flat; headed for 5 pct monthly fall
* Recent outperforming dollar gives up some gains
* Gold continues fall; oil also retreats
By Rafael Nam
HONG KONG, Feb 27 (Reuters) - Asian shares were flat on
Friday, ending the month with losses on continued investor
concern over the world economy and the financial system, while
safety bids such as dollar buying erased some of their recent
gains.
The advances in stock markets at the start of the year
unraveled further in February as the MSCI index of Asian shares
outside Japan headed for a 5 percent monthly fall, having hit
at one point their lowest since the five-year lows in late
November.
Risk aversion in February was reflected in the surge of the
dollar, which is on track to its biggest monthly gain against
the yen since 1995, and a rally in gold that took it past the
$1,000 an ounce barrier to approach a March 2008 record.
Weak economic data in Asia, including double digit export
drops and contractions in gross domestic product, also
pummelled currencies such as the South Korean won.
"The drop in exports in the region continues to take a
terrible toll on GDP and the region's economies will continue
to decelerate for some months to come," said Calyon in a note
to clients on Friday.
"The pressure on Asian currencies remains broad based and
in an environment of high risk aversion, weak equity markets,
portfolio capital outflows and collapsing exports the trend is
clearly lower."
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> was 0.3 percent lower flat as of 0335 GMT. It
is now about 10 percent above the five-year low hit on Nov. 21
The index has lost about 12 percent for the year so far, as
investors find it hard to be optimistic about the economy,
despite government stimulus such as the $787 billion U.S.
economic rescue package approved this month.
Data on Thursday showed the number of U.S. workers
continuing to receive state jobless aid jumped to record high
in mid-February and new orders for long-lasting manufactured
goods reaching a six-year low in January. []
In Japan, production at factories fell by a record 10
percent last month, and new jobs proved harder to find, showing
the country's worst recession since World War Two is deepening,
according to reports on Friday []
The financial system also continues to reel, as banks have
trillions of dollars of potential losses on their books after
the collapse of the U.S. property market triggered a credit
crunch, leading to a full-blown financial crisis and worldwide
recession.
Data on Thursday showed the number of problem banks on a
U.S. watchlist jumped in the fourth quarter, while Royal Bank
of Scotland <RBS.L> reported the biggest corporate loss in
British history. [] []
Some of Asia's big stock indexes gained on Friday, though
analysts were hesitant about whether that would be sustained.
"The volume is still terrible so it's hard to get a real
feel. But people are somewhat reluctant to be in the market and
exposed to equities and that may continue for some time," said
Richard Herring, a director with stockbrokers Burrell & Co in
Australia.
The Nikkei average <> gained 1.3 percent after
flirting with 26-year lows this month.
South Korea's stock index <> rose 1.4 percent, while
markets in Australia <>, Hong Kong <> and Taiwan
<> gained less that 1 percent each.
Shares in Shanghai <> and Singapore <.FTSTI> fell.
DOLLAR PARES GAINS
The dollar fell against the Japanese yen as investors
booked profits from a recent rally. The U.S. currency has
benefitted from an at times intense flight to safety.
President Barack Obama forecast on Thursday a $1.75
trillion deficit for the 2009 fiscal year, the biggest U.S.
deficit since World War Two in a budget, underlining the heavy
blow the deep recession has dealt to the country's finances.
The yen rose 0.7 percent from the previous day's U.S. trade
to 97.85 <JPY=> to the dollar after on Thursday hitting a 3-
