* MSCI Asia ex-Japan down 1 pct, Nikkei up 1.9 pct on weaker
* European shares seen opening 0.6-0.8 pct lower
* Data at 1000 GMT expected to show euro zone back in
* Euro steady around $1.2733, dollar hits 6-1/2 mth high at
* Middle East tensions support oil, Brent edges near $110 a
By Alex Richardson
SINGAPORE, Nov 15 Asian stocks mostly fell on
Thursday as investors reacted to the prospect of drawn-out
negotiations over the looming U.S. "fiscal cliff" by shedding
riskier assets, but Japanese equities defied the trend as a
sharp slide in the yen lifted exporters' shares.
European shares were seen falling for a second day, hit by
U.S. concerns and the continent's own intractable debt crisis,
with data due later in the day expected to show the euro zone
slid back into its second recession since 2009 in the third
The retreat from risk also weighed on commodities, although
oil held its gains after jumping in the previous session due to
rising tensions in the Middle East after Israel launched an
offensive against Palestinian militants in Gaza.
"Markets are reflecting worse case scenarios today with
investors fleeing in droves," said Ben Taylor, a trader at CMC
Markets in Australia, where the main share index fell to
a two-month low.
"Tensions escalating in the Middle East added to the panic
MSCI's broadest index of Asia Pacific shares outside Japan
fell 1 percent, with shares in South Korea
and Hong Kong prominent among the losers.
Financial bookmakers called major European indexes
to open down 0.6-0.8 percent. Underlining the
euro zone's problems, anti-austerity marches across southern
Europe turned violent on Wednesday, while data due at 1000 GMT
was expected to show the bloc's output shrank 0.2 percent in the
Bucking the gloom, Tokyo's Nikkei rose 1.9 percent as the
boost given to exporters such as Toyota Motor Corp,
Honda Motor Co and Canon Inc. as the drop in
the yen to a six-month low outweighed global concerns.
ELECTION CALL BOOSTS YEN
The yen had fallen the most against the dollar in two months
on Wednesday after Japanese Prime Minister Yoshihiko Noda
indicated he would call a snap election next month that the
opposition Liberal Democratic Party, which favours further
monetary policy easing by the central bank, is expected to win.
"Everyone is expecting Shinzo Abe from the LDP to be the
next prime minister. He will pressure the BOJ to conduct bold
monetary easing by setting a 2 to 3 percent inflation target,"
said Shun Maruyama, chief Japan equity strategist at BNP
"In the near-term, we can be bullish on the Nikkei and
bearish on the Japanese yen."
The Japanese currency sank further on Thursday after Abe
said he wanted the Bank of Japan to set interest rates of zero
or below zero to encourage lending.
His comments pushed the yen to a 6-1/2-month low
against the dollar at 80.83, a boost for Japanese exporters who
gain when returning overseas earnings to Japan and boosting
One prominent exporter missed out on the rally, however.
Shares in Playstation maker Sony Corp tumbled 8.9
percent after the company said it would raise $1.9 billion
through a sale of convertible bonds.
HEADING FOR THE CLIFF
U.S. stocks fell more than 1 percent on Wednesday after
President Barack Obama reiterated his call for the wealthy to
pay higher taxes, setting the stage for a tough budget battle
with Congressional Republicans.
Investors fear that the package of tax increases and
spending cuts mandated to come into force next year if a deal is
not agreed - the so-called "fiscal cliff" - will pitch the
world's biggest economy back into recession, dealing a fresh
blow to the fragile global economy.
S&P 500 futures edged up 0.2 percent on Thursday,
pointing to a weak rebound when trading on Wall Street resumes.
The euro, which has generally tended to move with riskier
assets in recent months, rose 0.1 percent to around $1.2750
, having halted a five-day slide that had taken the single
currency to its lowest in more than two months.
Benchmark Brent crude firmed 0.1 percent to around
$109.75 a barrel, having risen more than 1 percent on Wednesday
after Israel launched airstrikes in retaliation from rocket
attacks on its territory, killing the military chief of Hamas.
U.S. crude was flat at around $86.35 a barrel.
"The overall economy is weak, but prices are biased to rise
because geopolitical risks are going up," said Tony Nunan, a
risk manager at Mitsubishi Corp. "That's going to be the story
for the rest of the year - a weak economic outlook, but higher
prices because of supply worries."
Gold crept lower to just below $1,725 an ounce.