* Australian business mood improves, stimulus flows
* Obama says will save or create 600,000 jobs in 100 days
* Asian shares falter on worries rally overdone
* Japan to delay fiscal goal as debt climbs-Nikkei
* US bailout panel: more bank stress tests may be needed
By Wayne Cole
SYDNEY, June 9 (Reuters) - Australian business confidence jumped in May by the most since 2001, adding to signs that governments' stimulus splurges are working after the White House forecast 600,000 jobs would be created or saved in coming months.
Global economic data has started to improve, partly spurred by trillions of dollars of state spending in response to the deepest recession in six decades. A survey from the OECD on Monday said its economic outlook declined at a slower pace in April, suggesting a bottoming out of the slump.
But doubts remain about the durability of the nascent recovery, underlined by World Bank President Robert Zoellick, who told a forum in Montreal it was not clear where demand would come from to fuel an economic revival.
In a reminder that banks still sit on large amounts of toxic assets, the U.S. Congressional Oversight Panel said on Tuesday that U.S. bank stress tests should be repeated if unemployment rises beyond levels assumed by regulators in a recent round of examinations that provided relief to markets.
Those concerns weighed on markets on Tuesday, with Asian shares falling for a second day after a rally that has driven Japanese stocks up about 40 percent from a year low plumbed in March.
"There's a sense in the market right now that the Nikkei may be a bit overheated, a bit overbought," said Noritsugu Hirakawa, a strategist at Okasan Securities in Tokyo, where the index has stalled within striking distance of the key 10,000-mark last seen in October.
"We have some key global economic indicators due out later this week, including U.S. retail sales, and if these confirm the growing impression that the global economy is improving, we're likely to see the Nikkei shoot up through 10,000."
STIMULUS SPENDING
In Australia, a monthly survey of more than 400 firms showed its measure of business confidence jumped 12 points to -2 in May, with notable improvements in construction, manufacturing and wholesale.
While negative, it was the highest reading since February 2008 and, apart from wild swings that followed the Sept. 11 attacks, it was the biggest bounce since the series began in 1989.
Taken with a separate survey that showed job advertisements fell at the slowest pace in 13 months in May, the reading offered hope that Australia could remain one of the few developed countries to have escaped recession.
"The stimulus from the federal budget has clearly raised hopes of a government investment-led recovery, with construction industry confidence leading the way," said National Australia Bank chief economist Alan Oster.
Australia's $42 billion stimulus spending has been dwarfed by the $787 billion thrown at the U.S. economy, and President Barack Obama said on Monday he expected to create or save 600,000 jobs over the next 100 days by speeding up 10 major projects funded by the package.
The weight of government spending by Japan to fight its worst recession since World War Two has forced Tokyo to put off its long-term fiscal reform plan by 10 years, the Nikkei business daily reported on Tuesday.
Japan's fiscal situation is the worst among the big economies, with the government forecasting that the ratio of its long-term debt to gross domestic product will climb to 170 percent by the end of 2009/10.
The government's top economic advisory council will propose a plan to balance its budget outside debt issuance within 10 years, the Nikkei reported.
STRESS TESTS
The downturn that has swept through developed countries and emerging economies had its roots in a U.S. housing market bust in 2007 and the resulting losses tied to risky home loans that crippled big banks.
Last month, U.S. regulators ordered 10 banks to raise nearly $75 billion in new capital after "stress testing" the top 19 lenders. The exercise was greeted with relief by markets, which had feared the capital hole would be much larger.
On Tuesday, a watchdog panel said in a report the stress tests should be repeated if U.S. unemployment rises beyond the levels assumed by regulators.
May's unemployment rate of 9.4 percent pushed the average for the year to 8.5 percent, not far from the 8.9 percent assumed in the tests, which were aimed at gauging the banks' ability to withstand further economic shocks.
The report comes as the U.S. Treasury is preparing to announce which of banks will be allowed to repay billions of dollars in emergency government capital injections.
Nine of the 19 banks, which each have assets exceeding $100 billion, have met conditions set by the Federal Reserve for repayment, including selling new shares, issuing debt without a government guarantee, and resolving capital deficiencies. The nine banks have received $66.7 billion in government capital.
The Wall Street Journal earlier reported that nine banks will be allowed to repay more than $50 billion in taxpayer funds. Bloomberg reported that 10 banks, including JPMorgan Chase & Co will be allowed to repay. (Writing by Alex Richardson; Editing by Jan Dahinten)