* MSCI Asia ex-Japan stocks index down 4th day
* Commodities extend losses on demand fears
* Questions mount on recovery's sustainability
* U.S. dollar steady after BRIC gives it a pass
(Repeats to more subscribers)
By Kevin Plumberg
HONG KONG, June 17 (Reuters) - Most stocks in Asia edged
lower on Wednesday, weighed down by resource-related shares and
doubts about a global economic recovery, while oil slipped
below $70 a barrel ahead of U.S. inventory data that could
reflect slowing energy demand.
U.S. Treasuries eased on profit taking after a surge
overnight, but may not stay down for long, especially after the
Federal Reserve bought $6.45 billion in Treasury debt on
Tuesday and a report showed industrial capacity use at a record
low.
Several U.S. economic indicators this week have come in
below expectations, raising fears that investors may have
pushed up equity and commodity prices too far, too quickly.
"The market does need to come off because lot of cyclicals
have become very expensive very quickly," said Damien Boey,
equity strategist at Credit Suisse in Australia.
"There is still economic recovery in the wings and we are
still yet to see it in the data and the financials have not
actually gone up in full measure."
The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> fell 1 percent and looked set for its fourth
consecutive day of losses. The index has now fallen 5.6 percent
from an eight-month high reached two weeks ago.
The materials sector had continued to climb after the broad
market began to drift lower after June 3, but along with the
energy sector this week has been leading the region lower.
Japan's Nikkei share average <> eked out small gains,
rising 0.4 percent in listless trade. Defensive sectors, such
as pharmaceutical and food-related stocks, were among the main
supports to the index.
U.S. markets fell more than 1 percent overnight as mixed
economic data and disappointing sales by top U.S. consumer
electronic retailer Best Buy spurred worries about an anaemic
recovery. []
The U.S. dollar was largely unchanged on the day against
the euro and yen, after Brazil, Russia, India and China after a
first summit together issued a joint statement that did not
mention any doubts about the dollar's role as the primary
reserve currency.
The dollar had been under some pressure heading into the
summit on fears that Russia, which has publicly made clear it
wants to have new world reserve currencies, would coax China
into bashing the dollar together. []
The euro was at $1.3825 <EUR=>, down 5 cents since hitting
a 2009 high around $1.4337 on June 3.
The dollar was trading at 96.41 yen <JPY=> after earlier
taking a brief dive below 96.00 yen to a two-week low.
Besides headlines about the U.S. dollar's global reserve
role, perceptions on risk expressed through equity markets have
also been a driver. Fears that price increases have run ahead
of fundamentals, particularly with earnings estimates for 2010
in the double digits, have weighed on global stocks.
"That is a similar picture of markets around the globe and
quite appropriately so, given we are in the midst of a
reassessment of expectations for the global economy - about
which there is little more agreement than that challenges lie
ahead," said Patrick Bennett, Asia foreign exchange and rates
strategist with Societe Generale in Hong Kong in a note.
Commodity markets have been very sensitive to this notion.
U.S. crude oil futures fell a fourth day, with the July
contract <CLc1> down 0.3 percent to $70.25 a barrel after
touching a session low of $69.91 earlier.
The American Petroleum Institute data showed late on
Tuesday that U.S. crude stocks fell by a smaller-than-expected
1.3 million barrels last week. The U.S. Energy Information
Administration will release its inventory data later in the
day.
The Reuters-Jefferies CRB index <.CRB>, a basket of 19
commodity futures, has slipped about 4 percent from a
seven-month high reached last Thursday. It was still up 15
percent since the end of April.
The benchmark 10-year U.S. Treasury yield <US10YT=RR>
ticked up to 3.68 percent after tumbling to 3.66 percent late
on Tuesday in New York. After climbing to an eight-month high
of 4 percent on Thursday, the 10-year yield has come off
sharply as investors bought back bonds with a higher coupon as
doubts about the recovery pile up.
(Additional reporting by Denny Thomas in SYDNEY)
(Editing by Kim Coghill)
