Asian shares edge down, China PMI offers support

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TOKYO (Reuters) - Asian shares edged lower and the dollar gave up some of its recent gains on Monday, as investors cautiously awaited key U.S. data this week but took heart from a decent reading on China manufacturing.

China's factory activity maintained steady growth momentum in November, boosted by resilient new orders, though the pace of expansion eased slightly from October, the HSBC/Markit Purchasing Managers' Index (PMI) showed.
The final PMI reading came in at 50.8 in November, down from 50.9 in October but improving from a preliminary reading of 50.4.
"The data broadly says that things are stabilizing in China and there's probably less downside risk to prices," said Thomas Lam, chief economist at DMG & Partners Securities in Singapore. "But I don't think it foreshadows significant pick-up from here into next year," he said.
MSCI's broadest index of Asia-Pacific shares outside Japan was down about 0.2 percent, paring losses after the PMI survey.
One regional standout underperformer was Thailand, where the SET index (.SETI) tumbled more than 1 percent as anti-government protesters vowed to forge ahead with a "people's coup" campaign to topple Prime Minister Yingluck Shinawatra.
Japan's benchmark Nikkei (NIK:^9452) shed about 0.4 percent.
Last month, the Nikkei rallied 9.3 percent, spurred by strong earnings and a weakened yen. The index hit its highest closing level in nearly six years on Thursday.
Data released on Monday showed Japanese companies raised spending on factories and equipment in the July-September quarter. However, the slow pace of the increase cast some doubt on whether capital spending is as strong as needed to help sustain economic growth.
Bank of Japan Governor Haruhiko Kuroda said capital expenditure will likely increase as a trend, though he warned in a speech to business leaders on Monday that overseas uncertainties were among key risks for the BOJ to meet its target of 2 percent inflation in about two years.
The BOJ's commitment to ultra-easy monetary policy as it shoots for this goal has kept pressure on the yen, though it held its ground on Monday.
The dollar slipped about 0.1 percent to 102.35 yen, moving away from a six-month high of 102.61 yen touched on Friday.
Against the dollar, the euro was slightly higher at $1.3601, while the dollar index (.DXY), which tracks the U.S. unit against a basket of major rivals, lost 0.2 percent to 80.553.
The euro added about 0.1 percent against its Japanese counterpart to 139.22 yen, moving back toward Friday's five-year high of 139.70 yen.
"The dollar finished November at its highest level against the yen since May. It appears to have broken out of the six month consolidative pattern," Marc Chandler, global head of foreign exchange strategy at Brown Brothers Harriman, said in a research note.
While the 140-yen area could mark psychological resistance for the euro, the 141-yen level could be more significant from a technical perspective, Chandler said, as it represents 61.8 percent retracement of the euro's slide from 170 yen in 2008 to the 2012 low around 94 yen.
PAYROLLS IN FOCUS
U.S. data later in the week remains a key focus, with the Federal Reserve poised to reduce its stimulus as soon as it deems the economy is strong enough.
Nonfarm payrolls for November is scheduled for release on Friday, with economists expecting an increase of 185,000 jobs last month, down from 204,000 in October, according to a Reuters survey of economists.
Other major economic indicators due this week include the Institute for Supply Management's data on the U.S. manufacturing and services sectors. The ISM factory index will be released later on Monday, and the ISM services index is due on Wednesday.
In commodities trading, gold was down about 0.5 percent at $1,246.26 an ounce, undermined by concern that signs of a stronger U.S. economy could compel the Fed to reduce its stimulus. Gold has lost around a quarter of its value so far this year, on track to post its first annual loss in 13 years.
Copper shed about 0.3 percent to $7,030.75 a ton as expectations for a swelling market surplus next year offset any cheer from the China PMI survey. Copper lost 2.7 percent in November.
Brent crude oil gained about 0.5 percent to $110.25 a barrel, lifted by the China data, after it shed more than $1 on Friday. U.S. crude was about 0.4 percent higher at $93.12 as traders weighed supply outages in Libya against U.S. inventory levels
PRINCE BIKRAM SHAH
P.G.D.M 1ST