* MSCI Asia ex-Japan retreats from highs in volatile trade
* HSBC China PMI improves from December, lifts sentiment
* Apple's below-view results, N. Korea threat drag markets
* Yen pulls back vs dollar after two-day rebound
By Chikako Mogi
TOKYO, Jan 24 (Reuters) - Asian shares fell on Thursday in
choppy trade, as positive Chinese manufacturing data was
eclipsed by North Korea threatening a nuclear test and on
below-view results from Apple Inc.
"Markets see a global economic recovery trend but there is
no consensus on the strength of growth, capping many markets.
Equities have been clearly benefiting from accommodative
monetary conditions," said Koichiro Kamei, managing director at
financial research firm Market Strategy Institute.
China's HSBC flash purchasing managers' index (PMI) rose to
51.9 in January to a two-year high, signalling a rebound in
manufacturing activity and confirming a recovery in the world's
second largest economy was on track.
However, while the data briefly spurred markets higher,
geopolitical uncertainty on the Korean peninsula and Apple's
disappointing earnings dented overall demand.
The MSCI's broadest index of Asia-Pacific shares outside
Japan was down 0.4 percent after rising as much
as 0.2 percent earlier. The index briefly touched a fresh
17-1/2-month high the day before, exposing many bourses to
profit taking pressures ahead of the regional earnings season
set to start in earnest later this month.
The pan-Asia index's technology sector and
the region's Apple suppliers fell after the world's largest
technology company missed revenue forecast for the third
straight quarter after iPhone sales undershot expectations,
sending its shares down over 10 percent in after-hours trading.
A sharp drop in Apple's component suppliers such as South
Korea's LG Display and Taiwan's Hon Hai
dragged South Korean shares down 0.9 percent and Taiwan
stocks down 0.6 percent.
China shares surrendered strong early gains,
weighing on Hong Kong, after North Korea said it would
carry out a nuclear test that would target the United States,
dramatically stepping up its threats against a country it called
its "sworn enemy".
Bucking the trend, Australian shares rose 0.5 percent
to a fresh 21-month high after reversing morning losses
after the data from China, Australia's top export market.
The data also helped push Japan's Nikkei stock average
up 1.3 percent, as firms with high exposure to the
Chinese economy notching up gains. Most Japanese suppliers to
Apple also recouped earlier losses.
"The underlying tone is still bullish, so even bad news
about Apple or whatever doesn't hit stocks too hard," said
Masato Futoi, head of cash equity trading at Tokai Tokyo
Securities, adding that three days of losses spurred dip-buying.
European markets are seen easing, with financial
spread-betters predicting London's FTSE 100, Paris's
CAC-40 and Frankfurt's DAX would open down as
much as 0.1 percent. U.S. stock futures were down 0.3
percent, pointing to a softer Wall Street start.
YEN BUYING HALTED
The two-day yen buying spree came to a pause. The currency's
recent rebound came after the Bank of Japan's latest policy
easing steps on Tuesday failed to provide immediate stimulus as
expected by some investors. The BOJ pledged to achieve a 2
percent inflation target and promised to start open-ended asset
buying from 2014.
The dollar rose 0.8 percent to 89.33 yen while the
euro also advanced 0.8 percent to 118.93 yen. The yen
is still down 12 percent from its mid-November levels, when
markets began pricing in strong monetary accommodation from the
Many market players believe the yen's weakness will persist
due to widespread expectations the BOJ will continue pursuing
aggressive monetary easing policies to beat the country's
"I think we will struggle to break 91, but I will still keep
looking for us to trade above 90 in the short-term," said Jesper
Bargmann, Asia head of G11 spot FX for RBS in Singapore,
referring to the outlook for the dollar versus the yen over the
next week or so.
Data on Thursday confirming a deteriorating Japanese trade
balance also encouraged yen selling, traders said. Japan logged
a record annual trade deficit in 2012.
Investors were aalso reminded of the challenges facing the
global economy on Wednesday when the International Monetary Fund
predicted that an unexpectedly stubborn euro zone recession and
weakness in Japan will hurt world growth. A Reuters poll also
showed Asian economies will see weaker growth this year despite
expected policy easing by central banks.
U.S. crude rose 0.4 percent at $95.57 a barrel while
Brent steadied at $112.78.
London copper was down 0.3 percent at $8.076 a tonne
and spot gold fell 0.4 percent to $1,678.81 an ounce,
slipping from a recent one-month high.