Asia stocks hit 1-month highs, but Nikkei dips

HONG KONG (Reuters) - Asian stocks touched one-month highs on Tuesday as worries about a global credit squeeze continued to recede, but caution ahead of influential U.S. data this week kept a lid on markets and major currencies.

European stocks were predicted to open lower, struggling for direction, with London's FTSE 100 (FTSE: - ) seen off 12-14 points, according to financial bookmakers, after rising 0.2 percent on Monday.

Tokyo's Nikkei sagged as investors worried about recent disappointing economic data, while safe-haven Japanese government bonds (JGBs) rose after an auction of 10-year notes attracted fair demand.

"The worst from the U.S. subprime mortgage crisis appears to be over, and the main question left is whether the Fed will lower interest rates at its September 18 meeting," said Kim Hak-kyun, an analyst at Korea Investment and Securities.

MSCI's measure of Asia Pacific stocks excluding Japan ( - ) rose 0.5 percent by 2:20 a.m. EDT after earlier reaching levels last seen on August 1, but Tokyo's Nikkei average (Osaka: - ) fell 0.6 percent, extending Monday's 0.3 percent dip.

Hong Kong's Hang Seng Index (HKSE: - ) hit a record high, led by China Construction Bank (HKSE: - ) after Beijing said it would review the lender's plans for a domestic share sale.

Australia's S&P/ASX 200 index (ASX: - ) climbed for a fourth straight session, up 0.4 percent at a six-week closing high, boosted by data showing stronger-than-expected economic growth in the past quarter.

Korea Exchange Bank (004940.KS) finished 1.7 percent higher, after climbing as much as 8.2 percent at one stage following news that Europe's biggest bank HSBC (LSE: - ) will buy 51 percent of the South Korean lender.

HSBC's Hong Kong shares (HKSE: - ) edged up 0.1 percent.

RECOVERING

The MSCI index has risen in the past two weeks and is now up 19 percent from a five-month trough plumbed on August 17 but still down about 5 percent from its July 24 record high.

Markets have generally been on a recovery path since the U.S. Federal Reserve slashed a key bank lending rate on August 17 to help soothe fears of a credit shortage stemming from the U.S. subprime mortgage crisis.

Comments from U.S. President George W. Bush and Fed Chairman Ben Bernanke late last week about tackling the credit problem have further helped shore up sentiment.

But data on Monday showing Japanese firms unexpectedly cut capital spending by 4.9 percent in April-June from a year earlier weighed on the Nikkei.

"There's no doubt these figures raised doubts about Japanese domestic consumption and this has led to some selling of related shares. There really is no big reason to buy," said Tsuyoshi Nomaguchi, strategist at Daiwa Securities.

YEN STEADY

Forex investors took a wait-and-see attitude ahead of a flood of U.S. data, keeping the major currencies in a narrow range.

"The panic is almost over, but the market has lost its direction and is waiting for more news, especially any good news," said Kikuko Takeda, currency strategist at Bank of Tokyo-Mitsubishi UFJ. "People know it'll take some time to restore normal market conditions. There is no quick solution."

The dollar bought 115.81 yen, little changed from 115.97 yen in London trade on Monday, while the euro was at $1.3622 compared with $1.3624 in London.

Against the yen, the single currency was also steady near 157.76 yen.

But the Australian dollar jumped to a week high near 82.70 U.S. cents after strong economic growth data revived speculation of interest rate hikes.

In the commodity market, U.S. crude (CLc1) hovered above $74 a barrel after OPEC kept a lid on output in the run-up to its September 11 ministerial meeting. Spot gold edged above $673 an ounce.

Japan's benchmark 10-year JGB yield eased two basis points to 1.615 percent after the 10-year JGB auction.

"It looks like the auction drew more demand than expected from dealers to cover short positions," said Keiko Onogi, senior JGB strategist at Daiwa Securities SMBC.