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* Nikkei up for first time this week, strong yen caps gains
* Asia-Pacific shares up, European stock markets open lower
* Oil down on higher inventories
SINGAPORE, Aug 18 (Reuters) - Most Asian stocks rose on Wednesday as earnings from two U.S. retail giants and a $39 billion takeover bid in the farm sector bolstered investor confidence, but mixed U.S. economic data capped gains.
Japanese shares gained as investors hunted for bargains following an eight-month closing low the previous day, but the rise was limited by the yen's persistent strength against the dollar.
Major European shares .FTEU3 opened 0.4 percent lower, with investors taking profits from one-week highs hit the previous day, with energy shares likely to track weaker oil futures.
Shares of global miner (BHP.AX)(BLT.L) were in focus in Asia, falling to 4.2 percent to A$38.51 on concerns that it may have to pay too much to buy fertiliser group Potash Corp after the Canadian group rejected the original offer.
The Anglo-Australian miner, sitting on an estimated $11 billion cash pile, is looking to capitalise on a resurgence of the global fertiliser industry following a collapse in demand during the global economic slowdown.
"It is just BHP; one big story taking out a lot of points from the index," Ben Potter, a research analyst at IG Markets said.
While the BHP sell-off dragged down Australia's main share index and helped spur the Canadian dollar, investors elsewhere in the region saw the takeover bid as a sign of confidence in an otherwise lacklustre market.
The MSCI share index for Asia excluding Japan .MIAPJ0000PUS was up 0.46 percent following gains on Wall Street after retailing giants Wal-Mart Stores Inc (WMT.N), and Home Depot Inc (HD.N) beat earnings estimates.
Some analysts warned, though, that profits driven by cost cutting did not demonstrate underlying strength in the economy.
In the latest U.S. economic data, producer prices increased in July for the first time in four months, helping to allay concerns about deflation, but housing starts rose at a weaker rate than expected and permits fell to their lowest point in more than a year. [ID:nN16267366].
Japan's Nikkei .N225 average closed 0.9 percent higher, with investors buying shares on dips.
Market players said, however, it was hard to see the benchmark index racking up substantial gains without a sustained weakening of the yen. though a short-term rebound seemed overdue after the Nikkei slumped to a 13-month low at 9,065.94 last week.
The dollar shed 0.1 percent against the yen to 85.39 yen JPY=, slipping back toward a 15-year low of 84.72 yen plumbed last week. "The trend of dollar-selling looks unchanged," said a trader for a Japanese foreign exchange broker.
Investors are watching whether the Bank of Japan or the government will act to stem the yen's export-sapping rise ahead of a meeting between Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa expected next Monday.
"Today we're seeing short-covering prompted by the overnight Wall Street rise, but the main players are day traders and they tend to dump shares fairly quickly when any rises lose steam," said Norihiro Fujito, general manager of the investment research and information division at Mitsubishi UFJ Morgan Stanley Securities.
The euro fell 0.5 percent to 109.64 yen EURJPY=R, giving back much of the previous day's 0.6 percent gain and slipping back towards its lowest in nearly seven weeks of 109.07 yen hit on trading platform EBS earlier this week.
The euro could come under pressure again if the market's focus turns toward sovereign risks in the euro zone.
The yuan slightly rose against the U.S. currency as the People's Bank of China set a stonger mid-point to reflect the overnight weakness of the dollar .DXY against a basket of currencies in global markets.
But dealers said the room for more near-term gains was very limited as it takes time for China to gauge the impact of weakening major global economies on its exports. [ID:nTOE67F02M]
Oil prices fell on Wednesday after an industry report signalled petroleum inventories in top consumer the United States were headed for a record, following an unexpected sharp increase in crude stocks last week.
Gold gained on Wednesday, within sight of a 1-½ month high hit the previous day, reflecting persistent worries about the health of the global economy. The metal XAU= added $2.75 an ounce to $1,225.65, about 3 percent below a historic record struck in June.
"I think it really demonstrates a strong investment interest in gold that will continue, especially if we see people worried about the economic recovery," Ong Yi Ling, an investment analyst at Phillip Futures in Singapore. (Additional reporting by Elaine Lies in Tokyo; Editing by Tomasz Janowski)