* Euro slumps after Reuters report on ECB signal intentions
* Sterling steadies after British PM formally files for
* London shares seen opening lower, others in Europe rising
* Crude oil futures modestly extend overnight gains
By Lisa Twaronite
TOKYO, March 30 Asian shares turned lower on
Thursday after touching near two-year highs, while the dollar
benefited from waning expectations that the European Central
Bank was poised to end its easy policy.
Financial spreadbetters expected some of the gloom to extend
to European trading, with spreadbetters predicting Britain's
FTSE 100 would open lower. France's CAC 40 and
Germany's DAX were likely to open higher, with the DAX
continuing to close in on record highs seen in 2015.
MSCI's broadest index of Asia-Pacific shares outside Japan
was down 0.2 percent, stepping back from morning
trade when it nudged close its loftiest levels since June 2015.
Australian shares firmed 0.4 percent, helped by an
overnight gain in oil prices. Strong energy shares had helped
the U.S. S&P 500 end higher overnight.
China stocks were headed for a fourth day of losses amid
worries over property market prospects, sharp declines in
newly-listed stocks, and liquidity stress as the month-end
approached. The CSI300 index was down 1.0 percent,
while the Shanghai Composite Index lost 1.2 percent.
The Federal Reserve's monetary outlook and policymaking
under U.S. President Donald Trump have held sway in financial
markets over the past few months. While investors have more or
less come to terms with rising rates in the United States,
concerns remain around the Trump administration's ability to get
U.S. growth into a higher gear.
Last week's failure of Trump's U.S. healthcare reform bill
reinforced those doubts.
The dollar index, which tracks the U.S. currency against a
basket of six major rivals, was slightly up on the day at
100.030. It was lifted to a one-week high overnight as
the euro slipped on concerns about the impact of Brexit as well
as news that ECB policymakers are keen to reassure investors
that their easy-money policy is far from ending.
The euro was down 0.1 percent at $1.0756, after
Reuters reported ECB policymakers were wary of changing their
policy message following tweaks this month that upset investors
and raised the spectre of a surge in borrowing costs.
Prime Minister Theresa May formally began Britain's exit from
the European Union on Wednesday, launching a two-year
negotiation process before the divorce comes into effect in late
Sterling steadied at $1.2438 after skidding to a
one-week low of $1.2377 overnight.
"Brexit, to some extent, has been covered in the market
already. People went short, covered, and went short again," said
Kaneo Ogino, director at foreign exchange research firm
Global-info Co in Tokyo.
"As for the dollar, demand is still steady from pure
commercial orders, but the Japanese fiscal year ends this week
and Tokyo investors don't want to take new positions," Ogino
Against the yen, the dollar added 0.1 percent to 111.17
, well above this week's low of 110.110, its lowest since
Nov. 18, following Trump's healthcare reform blow.
Despite the dollar's gains on the day, it was far lower than
levels above 115 yen hit a few weeks ago, and Japan's Nikkei
stock index shed 0.8 percent.
"Investors have bought Japanese stocks mainly because of the
strong dollar-yen trend. Trump's healthcare defeat threw a wet
blanket on the Japan market's rally since last November," said
Takuya Takahashi, a strategist at Daiwa Securities.
Japanese stocks soared more than 10 percent since Trump's
election on hopes his administration would boost U.S. economic
growth to 3 percent or even higher.
The healthcare setback raised fears that Trump might face
challenges in getting his promised stimulus and tax reform
policies passed as well, which pressured the greenback and U.S.
But underpinning the dollar, Chicago Federal Reserve
President Charles Evans, a voter on the policy-setting Federal
Open Market Committee, said on Wednesday he supports further
interest rate hikes this year given progress on the Fed's goals
of full employment and stable inflation.
Comments from Boston Fed President Eric Rosengren and San
Francisco Fed President John Williams also backed multiple rate
hikes, though those officials are non-FOMC voters.
"There's a huge political fog around the world, in Asia, in
the U.S., but underneath it, there's actually quite a decent
economic recovery. And that's what's driving markets more than
the worries about politics," said Sean Taylor, Asia Pacific
chief investment officer at Deutsche Asset Management.
"The U.S. is continuing to do well. Europe isn’t doing as
badly as it was and because of the commodity pickup last year,
emerging markets are doing okay," he said.
U.S. crude futures added 0.3 percent to $49.67 a
barrel in Asian trading, while Brent crude futures rose
0.2 percent to $52.50.
Oil prices had surged more than 2 percent on Wednesday as
U.S. crude inventories grew less than expected, supply
disruptions continued in Libya and the OPEC-led output cut
looked likely to be extended.
(Additional reporting by Nicole Saminather in Singapore and
Ayai Tomisawa in Tokyo.; Editing by Shri Navaratnam and Richard