* Asian shares slump on concern about global economy
* NZ dollar under pressure after dovish c. bank statement
* Yen supported by flight to safer assets
By Susan Fenton
HONG KONG, Oct 29 (Reuters) - Asian shares fell on Thursday
after a set of weak U.S. data rekindled worries about global
growth and prompted a shift away from riskier assets, lifting
the yen and underpinning the dollar.
An unexpected drop in U.S. home sales last month, which
sparked a broad sell-off on Wall Street on Wednesday, followed
a decline in U.S. consumer confidence, highlighting risks to
recovery in the world's biggest economy.
That unnerved investors in the Asia Pacific, who trimmed
exposure to stocks and shifted out of high-yielding currencies
in favour of the dollar and the Japanese yen <JPY=>.
The New Zealand dollar came under additional pressure after
the central bank vowed to maintain record low rates until at
least July 2010.
"We're following on from a weaker lead offshore, with
everything down; metals, oil, gold the works, so naturally that
will take us lower as well," said Lucinda Chan, division
director at Macquarie Equities in Australia.
The yen's strength added pressure on shares of exporters in
Japan, driving the Nikkei index <> down 2 percent and
below the 10,000 mark for the first time in three weeks.
The yen rose to 90.56 to the dollar from 90.78 on
Wednesday, when it gained more than 1 percent, while the dollar
held firm against a basket of currencies <.DXY> near its
highest in more than two weeks.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> slid 2.3 percent while the Thomson Reuters
index of regional shares <.TRXFLDAXPU> was down 1.5 percent,
marking a third losing session in a row.
Sentiment soured after the Dow Jones industrial average
<.DJIA> fell 1.2 percent on Wednesday as the home sales report
overshadowed news that U.S. durable goods orders rose for the
second time in three months.
The housing data raised fears that U.S. third-quarter gross
domestic product, due out later on Thursday, would fall short
of forecasts. A Reuters poll estimates the world's biggest
economy grew at an annualised rate of 3.3 percent.
JAL SURGES 6 PCT
Receding rate rise expectations in New Zealand heaped
pressure on the Kiwi dollar <NZD=D4>, which fell as far as
$0.7163, its lowest level in more than three weeks, after the
central bank kept interest rates on hold and said it expected
them to remain at a record low until July at least.
[]
The bank's unexpectedly dovish statement dashed market
speculation New Zealand could raise rates early next year.
While Norway followed Australia and raised interest rates on
Wednesday as its economy recovers from the global downturn, New
Zealand central bank governor Alan Bollard was notably cautious
about the global outlook on Thursday.
"There remain significant vulnerabilities and challenges to
be worked through in many economies," Bollard said in a
statement. "This process could weigh on global growth going
forward."
Australian banks have also been surprisingly cautious this
week, despite being far less affected by the financial crisis
than their U.S. and European peers.
Mike Smith, chief executive of Australia and New Zealand
Banking Group <ANZ.AX>, the smallest of Australia's four big
lenders, said on Thursday the global financial crisis was only
just beginning to play out and global economies continued to be
fragile. []
"This isn't over yet," Smith said. "Often it's the
aftershocks that do the most damage."
The bank reported a strong recovery in second-half profits
but its cautious outlook helped push its shares down 2 percent
in Sydney in step with the benchmark S&P/ASX 200 index <>.
Resources stocks, hit by falling commodity prices, led the
decline, with mining giant Rio Tinto <RIO.AX> down 4.7 percent.
The oil price <CLc1> was down 0.2 percent at $77.28 a
barrel after losing $2.09 on Wednesday.
In Tokyo, Japan Airlines <9205.T> bucked the slide in
Japanese shares, surging 6.3 percent after the Nikkei business
daily said the government would announce a plan, as soon as
Thursday, to restructure the struggling carrier. []
NEC Electronics Corp <6723.T> tumbled 11.9 percent after
reporting on Wednesday a far bigger quarterly loss than a year
ago.
(Additional reporting by Adrian Bathgate in WELLINGTON;
editing by Tomasz Janowski)
