* Yen tumbles to 6-month low vs dollar on BOJ speculation
* Nikkei hits highest close in 6 years
* Aussie dollar edges to near 3-month low after RBA comments
* Gold stabilises after 2.6 pct slide overnight on strong
* European shares seen opening modestly lower
By Dominic Lau
TOKYO, Dec 3 (Reuters) - Asian shares hit the skids and the
dollar stood tall on Tuesday as a batch of upbeat U.S. economic
data confirmed the Federal Reserve's inexorable tilt towards
reducing its stimulus soon, while the yen sank on talk of
further central bank easing.
With the prospect of more cheap BOJ funds in the offing and
a weakened currency firing up the export sector, Japanese stocks
raced towards a six-year high.
In Europe, financial bookmakers are tipping a more subdued
start with major indexes seen opening
as much as 0.3 percent lower.
The U.S. Institute for Supply Management's index of national
factory activity rose in November to its best showing since
April 2011, while the pace of hiring also accelerated.
"If the employment and inflation data also beat
expectations, questions will get louder about when the Fed will
move, and this will see risk currencies in the firing line,"
Evan Lucas, market strategist at financial spreadbetter IG in
Friday's nonfarm payrolls report is expected to provide
further clues as to when the Fed will start reducing its monthly
$85 billion bond purchases, a major driver of global asset
markets in recent years.
U.S. stocks closed lower overnight, while U.S. benchmark
10-year Treasury yields ended near 2.8 percent at a
"A drop in the unemployment rate from 7.3 percent to 7.0
percent would fan tapering fears, preventing U.S. Treasuries
from reversing course even on a lacklustre 150k NFP," Societe
Generale said in a note.
With the U.S. Treasury yields moving higher, so did the
appeal of the dollar.
The dollar hit a six-month high of 103.38 yen,
extending a 0.5 percent gain overnight and less than half a yen
away from a 4-1/2 year high reached in May. The yen was also
weighed down by speculation that the Bank of Japan may expand
its already massive stimulus.
According to officials briefed on the process, the BOJ is
looking to go beyond its $70 billion-a-month bond-buying
programme. Options include major purchases of
stock-market-linked funds or other assets riskier than Japanese
government bonds, the insiders said.
The yen's weakness helped lift Tokyo's Nikkei benchmark
, which hit its highest closing level in six years.
MSCI's broadest index of Asia-Pacific shares outside Japan
shed 0.6 percent, breaking below its 50-day
Despite the expectations of the Fed soon cutting stimulus,
the global economy recovery remained fragile. Miner Rio Tinto
said on Tuesday that it expected to halve
capital spending to $8 billion by 2015 from last year's level to
AUSSIE DOLLAR DOWN
The Australian dollar dropped 0.4 percent to
$0.9072, close to a near three-month low of $0.9055 hit on
Friday, after the Reserve Bank of Australia said the currency
was "still uncomfortably high" and that a lower exchange rate
was needed to achieve balanced growth.
The central bank, as expected, kept its cash rates steady at
a record low of 2.5 percent. All 20 analysts in a Reuters poll
had forecast the RBA would hold rates this week, though many
still expect a further easing in coming months.
The Aussie dollar gave up earlier gains after data showed
robust exports in July-September and strong retail sales in
Among commodities, gold added 0.1 percent to above
$1,220 an ounce, stabilising after slumping 2.6 percent to its
lowest since early July in the previous session after the U.S.
U.S. crude prices gained 0.2 percent to around $94 a
barrel, adding to a 1.2 percent rise overnight.