* Asia stocks slip after reaching 1-yr high
* Aussie falls after retail sales data stirs rate caution
* Dollar near 1-yr low, looking grim on charts
By Eric Burroughs
HONG KONG, Sept 9 (Reuters) - Asian stocks drifted lower
after initially hitting a one-year high on Wednesday and the
dollar hovered near a one-year low, with investors taking a
breather from moving money into riskier assets in the hope that
the global recovery is strengthening.
The dollar has been battered this week as market
participants have favoured high-yielding investments and
emerging markets, steering funds away from the safe-haven U.S.
currency. Gold's surge above $1,000 has also raised worries
that money is being shifted out of the dollar.
The Australian dollar slipped after Australian retail sales
surprisingly dropped in July and housing lending cooled. That
raised doubts about how soon the central bank would start
raising interest rates. []
"There has been sufficient strength in recent data and in
comment from policymakers for a shift to a tightening bias at
the October meeting," said Patrick Bennett, Asia FX and rates
strategist at Societe Generale, referring to the Reserve Bank
of Australia.
"What is appropriately being called into question is the
timing and extent of the action that follows."
Asia is at the forefront of unwinding ultra-loose monetary
policies put in place to stem the shock from the financial
crisis. With the growth revival in some countries proving
unexpectedly strong, some policymakers worry that cheap money
is fuelling asset bubbles.
Australia and South Korea are among the countries seen
closest to pulling the trigger on higher rates, with investors
focusing on a Bank of Korea meeting on Thursday for clues on
how quickly a rate hike could come.
South Korean authorities are among the most concerned about
a property price bubble. A report on Wednesday showed household
mortgage lending slowed in August after tighter controls.
Portfolio managers have been undaunted by the prospect of
monetary policy being normalised, with the process expected to
be a drawn out one as officials remain cautious about the
recovery's staying power.
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> dipped 0.1 percent and gave up early gains that
pushed the benchmark to a one-year peak.
So far this year the MSCI APXJ is up 53 percent, outpacing
the nearly 23 percent rise in world shares and 10.5 percent
increase in the MSCI index of Japanese shares.
Losses were mild across the region, with Japan's Nikkei
average <> dipping 0.3 percent and South Korea's KOSPI
<> shedding 0.5 percent.
Technology shares remain among the best performing in Asia.
Hynix Semiconductor <000660.KS> rose nearly 1 percent after
Merrill Lynch upgraded its rating on the world's No. 2 memory
chip maker to "buy" from "underperform" and tripled its target
price to 30,000 won.
In currencies, the dollar was little changed and held near
a one-year low against a basket of currencies at 77.268 <.DXY>.
The euro was flat at $1.4490 <EUR=> after having jumping as
high as $1.4535 the previous day.
The dollar's slide, which analysts partly blamed on model
funds dumping the currency due to the break higher in gold
prices, has taken it through chart levels that suggest a deeper
drop may be in store.
The dollar index has fallen through the 61.8 percent
retracement of its rally from a record low hit in March 2008 to
its highs reached in March this year, putting it on track to
revisit the record low.
Gold rose $5.50 an ounce to $1000.70 <XAU=> and hovered
just below the high of $1007.45 hit on Tuesday, putting it on
course to target the record high of $1030 hit in March 2008
when the dollar hit its all-time lows.
Safe-haven government bonds edged up on the dip in stocks.
Korean government bond futures were up 11 ticks at 109.98
<KTBc1> after hitting a five-week high of 110 in early trade
despite the mounting expectations for a rate hike later in the
year.
(Additional reporting by Charlotte Cooper in Tokyo; Editing by
Jan Dahinten)
