* Asian shares bounce from sharp losses, Nikkei up
* Oil retreats from 6-month peak, gold off 3-1/2 month high
* Indonesia cenbank seen lifting rates to defend currency
By Dominic Lau
TOKYO, Aug 29 (Reuters) - Asian shares recouped some of the
two previous sessions' steep losses on Thursday as fears abated
that U.S.-led forces would soon launch a military strike on
Syria, and oil prices retreated from a six-month peak.
Emerging market currencies stabilised after their recent
battering, with the Indian rupee coming off a record low after
the central bank moved to provide dollars directly to oil
companies, offering the currency some relief.
Indonesia's rupiah steadied near a four-year low with the
board of Bank Indonesia expected to announce an increase in its
policy rates after a hastilly-called meeting to defend the
The bounce in stocks and emerging market currencies could be
short-lived, however, with investors remaining on edge as the
United States sketched out plans for multinational air strikes
on Syria that could last for days.
"We assume that NATO military action is still the likely
scenario even if relatively limited in scope. Until there is
more clarity, our bias is to keep positioning low at the
moment," strategists at BNP Paribas said in a note.
European shares were expected to open slightly weaker, with
Britain's FTSE 100 seen down around 0.1 percent and
Germany's DAX down around 0.2 percent ahead of
consumer price data, according to financial spreadbetters.
Brent crude prices fell 0.7 percent below $116 a
barrel after climbing 2.6 percent to a six-month high on
Wednesday on concerns that any Western military strike could
prompt retaliation and disrupt crude supply in the Middle East
region, which pumps a third of the world's oil.
Gold eased 0.5 percent to around $1,410 an ounce
after gaining 1.2 percent to a 3-1/2 month high in the previous
session's flight to safety.
U.S. stocks rose overnight as energy shares rallied on the
back of higher oil prices.
"Wall Street's rebound will provide enough push for the
market to regain some of the previous sessions' losses," said
Dongbu Securities analyst Lee Eun-taek.
This helped soothe nerves in Asia, with MSCI's broadest
index of Asia-Pacific shares outside Japan up 1
percent after falling 2.2 percent in the previous two sessions.
But in a negative sign, companies' earnings momentum on the
MSCI Asian gauge deteriorated further to minus 8.7 percent from
minus 7.1 percent in July, according to Thomson Reuters I/B/E/S.
Japan's Nikkei share average advanced 0.8 percent in
light trade, helped by the safe-haven yen giving up some of the
recent gains that had taken it to a three-week high against the
The paring of yen positions also helped the euro edge off a
1-1/2 week low. The dollar last bought 97.70 yen, having
risen from 96.81, while the euro traded at 130.105 yen
, up from 129.66.
Emerging markets, which have been battered by the rising
geopolitical tensions as well as an expected reduction in
stimulus measures by the U.S. Federal Reserve, possibly as soon
next month, stabilised somewhat on Thursday.
The Indian rupee firmed 1.7 percent from a record low. But
analysts said central bank measures alone would not lead to a
sustained rupee recovery unless the government can pass measures
that convince markets of its willingness to tackle India's
fiscal and current account deficits and slowing growth.
"The measure is unlikely to arrest the decline in the rupee
with the authorities increasingly trying to find new means to
stem the rout in the currency," Mitul Kotecha, head of global
markets research for Asia at Credit Agricole in Hong Kong, wrote
in an email to clients.
Overnight, Brazil raised its benchmark interest rate to a
16-month high of 9 percent in part to help shore up its
The Indonesian rupiah edged up 0.1 percent on Thursday,
though not too far from its lowest since April 2009, while
Jakarta shares added 0.4 percent and Indonesia's
five-year credit default swaps, insurance-like contracts to
hedge against debt default, tightened by about 10 basis points
to 272/290 basis points.