* MSCI Asia ex-Japan eases from multimonth highs
* Nikkei slips ahead of BOJ decision Tuesday
* Dollar retreats from fresh 2-1/2-year high vs yen
* Gold inches up on Japan easing hopes
By Chikako Mogi
TOKYO, Jan 21 (Reuters) - Asian shares pulled back from
multimonth highs on Monday, while the yen firmed after touching
a new low in choppy trade ahead of a Bank of Japan policy
decision that is expected to deliver bold monetary easing
The MSCI's broadest index of Asia-Pacific shares outside
Japan edged down 0.2 percent despite pockets of
strength in Australia, Hong Kong and Shanghai. The index briefly
renewed a 17-1/2-month high touched on Friday following a
rebound in global equities late last week on upbeat U.S. and
Chinese data, as well as signs of progress in U.S. budget talks.
The Dow Jones industrial average and the Standard &
Poor's 500 Index ended Friday at five-year highs on a
solid start to the quarterly earnings season. U.S. markets are
closed on Monday for the Martin Luther King Jr. holiday.
"Asian markets are mixed with no dominant theme in place in
a fairly quiet start to the week," said Stan Shamu, market
analyst at IG Markets. "There hasn't been any economic data to
go by in the region and therefore we've had to rely on leads
from the weekend for some direction."
Australian shares inched up 0.1 percent to a
20-month high and Hong Kong shares hit a fresh
19-1/2-month peak, but underperformance in smaller bourses, such
as a 2.3 percent slump in Malaysian shares, dragged the
pan-Asian index. A stronger local currency hurt exporters and
weighed on South Korean shares.
European markets are seen tracking Friday's U.S. markets
higher, with financial spread-betters predicting London's FTSE
100, Paris's CAC-40 and Frankfurt's DAX
would open up as much as 0.4 percent.
The BOJ's two-day policy meeting which concludes on Tuesday
drew the attention of traders from several markets, with the
South Korean won's gains against the yen pulling the
exporter-heavy Kospi stock index down 0.1 percent, while
gold rose 0.4 percent on expectations for aggressive BOJ
Under growing political pressure to pursue bolder measures
to beat deflation, speculation over the BOJ's options ranged
from an open-ended commitment to buy assets until a 2 percent
inflation target is achieved to simply boosting its asset buying
"There is attention on the Bank of Japan, which is really
being pressured to embark on some very precious metals-friendly
policy," said a Hong Kong-based trader. Tokyo's benchmark gold
matched a record of 4,911 yen a gram on Monday.
Early on Monday, the dollar touched a fresh 2-1/2-year high
of 90.25 yen, and the euro rose to a high of
120.27 yen, near its peak since May 2011 of 120.73 hit on
But the yen clawed back some of its losses against the
dollar and the euro as traders locked in gains ahead of the
outcome of the BOJ meeting. The dollar slipped back to a low of
89.42 yen and was last trading at 89.57 yen, while the euro also
fell to a low of 119.08 and last traded at 119.27 yen.
"Profit taking pushed the dollar and the euro down against
the yen but short covering lifted them off their lows. Trading
is thin and quite volatile. I don't think there will be any
clear direction until the BOJ decision," said Yuji Saito,
director of foreign exchange at Credit Agricole in Tokyo.
Saito said "sell the fact" behaviour could push the dollar
down about 1 yen, but a serious disappointment on the BoJ
outcome was unlikely.
Tokyo's benchmark Nikkei average tumbled 1.5 percent
as investors booked profits from the Nikkei's 2.9 percent rally
on Friday, its biggest daily gain in 22 months. The Nikkei
posted a 10th straight week of gains, its longest since 1987.
Many investors largely keep short position on the yen.
"We expect the door for further easing will likely be left
open irrespective of the outcome of BoJ policy meeting, either
explicitly by the BOJ or implicitly through government's plan to
nominate doves to replace the governor and deputy governors,"
Barclays Capital said in a note to clients.
Friday's data showed while currency speculators slightly cut
their bets against the yen in the week to Jan. 15, they remained
overwhelmingly negative on the currency.
Oil prices took their cues from a weak consumer sentiment
report in the United States, which showed a drop to the lowest
in a year in January as a result of the uncertainty surrounding
the country's debt crisis.
Concerns about demand overshadowed supply disruption fears,
reinforced by the Islamist militant attack and hostage-taking at
a gas plant in Algeria, a member of the Organization of
Petroleum Exporting Countries.
U.S. crude futures fell 0.5 percent to $95.08 a
barrel while Brent fell 0.3 percent to $111.55 early on