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* MSCI Asia ex-Japan bounces back, still oversold
* China central bank assures on liquidity provision
* Shanghai shares can't shake off credit fears, pull Nikkei down
* U.S. data supports recovery view, Fed tapering plan
* Firmer dollar hits precious metals hard
By Chikako Mogi
TOKYO, June 26 (Reuters) - Asian shares turned around a four-day losing streak and rose on Wednesday after China's central bank assured it will offer funds to banks if needed, but lingering fears of a credit crunch and slower loan growth continued to drive selling of Shanghai shares.
Financial stocks fell nearly 2 percent in Shanghai, in turn dragging Japan's Nikkei to close down 1 percent after a solid start, overshadowing positive data from the United States underscoring an American recovery.
China's short-term borrowing rates eased for a fourth day but remained at elevated levels, and some traders expected liquidity to remain tight until mid-July.
European stocks were seen flat to slightly higher, with financial spreadbetters predicting London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX would open up to 0.2 percent firmer.
But U.S. stock futures were down 0.2 percent, pointing to a less confident Wall Street open.
Hong Kong shares gained 1 percent but Shanghai shares once again turned lower and extended losses to more than 1 percent, after tumbling nearly 7 percent at one point on Tuesday to the lowest since January 2009.
MSCI's broadest index of Asia-Pacific shares outside Japan pared early gains but still climbed 0.7 percent after plumbing an 11-month low on Tuesday, with bourses in Australia, South Korea, Taiwan and Southeast Asia firming.
Still, the gauge's relative strength index (RSI) was a weak 24.3, showing investor confidence in pan-Asian bourses remains badly shaken after a month-long emerging markets slide.
Traders were largely sceptical about prospects for a near-term market recovery, attributing strength in parts of Asia largely to short-covering after heavy selling in recent days. Indeed, foreign investors sold South Korean shares for the 14th straight session.
"The PBOC comments did not help much to improve people's confidence as the consequences are yet to be seen amid slow (China) economic growth," said Alex Wong, a director at Hong Kong-based Ample Finance Group.
"A firmer tone in Hong Kong-listed Chinese banks shares is purely short covering while in China, the weak tone will not change all of a sudden. Longer-term sentiment in both China and Hong Kong is still very weak."
China's short-term cash rates soared to record peaks last week when the central bank allowed money market funding to tighten, dramatically curbing credit for the lightly regulated and speculative "shadow banking" sector and stoking worries of a cash squeeze that could derail economic growth, offsetting the benefits from a stronger U.S. economy.
The People's Bank of China (PBOC) said late on Tuesday it had provided cash to some institutions facing temporary shortages and would continue to do so if needed, seeking to tame investor jitters amid spiking money market rates that raised fears of a banking crisis and sent shares plummeting.
DOLLAR FIRMS, GOLD PLUNGES
U.S. economic reports ranging from manufacturing and housing to consumer confidence buoyed optimism on Tuesday - after days of nerve-wracking uncertainty over the intentions of the world's biggest central banks.
The improving U.S. data underpinned the dollar, which in turn slammed precious metals hardest among generally bearish dollar-based commodities already weighed down by concerns about the Chinese and European economies.
"Overall these data align with the Federal Reserve's assessment that the U.S. economy is improving modestly, and specifically over the past two weeks, U.S. economic data has by and large beaten consensus forecasts," said Christopher Vecchio, analyst at DailyFX.
The Fed ignited a global market sell-off last week by announcing a plan to end stimulus, starting with a toning down of its monthly bond-buying later this year if the economy continued to improve as forecast.
The dollar pared early gains to ease 0.3 percent against the yen at 97.52, but held steady against a basket of major currencies to stay near a three-week high of 82.841 seen on Monday.
U.S. crude futures slipped 0.9 percent at $94.50 a barrel and Brent fell 0.5 percent to $100.77.
"What we have now is modest but sustained economic growth in the United States, but flat-lining and lower growth in China and Europe respectively, that basically evens out and it leaves us with a very flat outlook on demand," said Carl Larry, president of Houston-based consultancy Oil Outlook and Opinions LLC.
London copper slid 1.3 percent to $6,708 a tonne, nearing a three-year low of $6,602 on Tuesday.
Spot gold dropped 2.6 percent to a near three-year low of $1,243.94 an ounce, dragging spot silver down more than 4 percent to $18.71, its lowest since August 2010.
"A drop in emerging currencies has made dollar-based commodities prices more expensive and spurred outflows from commodities markets which have been suffering from fund outflows for some time now," said Tetsu Emori, a commodity fund manager with Astmax Investments in Tokyo.
Asian credit markets took comfort from rising regional equities, with the spread on the iTraxx Asia ex-Japan investment-grade index narrowing sharply by 10 basis points after spiking 20 bps on Monday.