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* Asian shares slip as Japan posts anaemic Q2 growth
* Weak Japan data underscores worries about global slowdown
* Yen inches up as investors reduce risk, look to havens
* Dollar retains strength vs major currencies
By Kevin Yao
SINGAPORE, Aug 16 (Reuters) - Japanese shares fell on Monday after data painted a gloomy picture for the economy, fuelling worries that a global recovery is rapidly faltering and spurring investors to shed risky assets.
A key index of 300 leading European shares <.FTEU3> opened
up 0.2 percent, with firmer oil
Japan's economy expanded just 0.1 percent in the quarter to June, far less than the 0.6 percent analysts had expected, as export growth moderated and a recovery in consumption driven by government stimulus ran out of steam. [ID:nTOE67901S]
Slowing growth in the country's key export destinations, such as the United States and China, an uneven recovery in Europe and a strong yen are clouding the outlook further.
Japan's Nikkei <.N225> fell 0.6 percent, after an early drop of as much as 1.7 percent, weighing on the rest of the region, though technical charts showed it was approaching oversold levels, suggesting it may be due for a rebound.
The MSCI share index for Asia excluding Japan <.MIAPJ0000PUS> fell 1 percent at one point but later clawed back most of the losses as investors snapped up Chinese stocks on optimism that the economy remains on strong growth track.
Economists are confident China's economic growth in 2010 will beat last year's outcome of 9.1 percent and catapult China ahead of Japan as the world's second-largest economy. [ID:nTOE67A01A]
The MSCI Asia ex-Japan index lost nearly 2.9 percent last week on growing concerns about the global recovery, its worst performance in six weeks.
"The yen's rise may begin to hurt export growth in the latter half of the current fiscal year. I think the Bank of Japan and the government need to take decisive action against currency moves. Solo currency intervention is possible if the yen approaches 80 to the dollar," said Takeshi Minami, chief economist at Norinchukin Research Institute.
"If that is accompanied by monetary easing by the Bank of Japan, it may have a certain effect."
But most investors doubted a direct market intervention by the Bank of Japan was on the cards and argued instead the central bank may opt for more quantitative easing to support growth.
Economists polled by Reuters expect Japan's economy to slow further in coming quarters, with some predicting a double-dip recession, and the yen's recent rise to 15-year highs against the dollar is likely to add pressure on exports. [ID:nSLAAJE6A1]
South Korean shares <.KS11> fell 0.2 percent, led by technology exporters and banking stocks including LG Electronics Inc <066570.KS> and KB Financial Group Inc <105560.KS> as traders awaited data on U.S. industrial production and earnings from key U.S. retailers for further clues on corporate and consumer demand.
"Concern about the economy is fueling foreign selling. We are also seeing substantial programme selling as the economic and stock market outlooks grow more uncertain," said Lee Sun-yeb, a market analyst at Shinhan Investment Corporation in Seoul.
YEN GAINS
The yen firmed broadly as high-yielding currencies faltered, with talk of possible demand from Japanese exporters and investor fund repatriation lending it additional support.
The flight from risky assets sent more buyers into government bonds as investors looked for safe havens.
The dollar fell 0.4 percent to 85.81 yen
The New Zealand dollar fell 0.7 percent against the yen to
60.43 yen
The dollar fell a third of a percent against a basket of currencies <.DXY> after briefly touching its highest since July 23.
Japanese government bond futures hit their highest in more than seven years, with September 10-year futures rising 0.19 point at 142.58 <2JGBv1>, after advancing as high as 142.62, their highest since June 2003.
Gold
U.S. crude