GLOBAL MARKETS-Asian shares softer before U.S. jobs data, dollar edges up

Reuters

* Dollar edges up vs euro, yen after recent battering

* U.S. nonfarm payrolls for Sept due at 1230 GMT

* Asian shares ex-Japan pull back from 5-month high

* Aussie shares at 5-yr peak for 3rd day

By Dominic Lau

TOKYO, Oct 22 (Reuters) - Asian shares pulled back from afive-month high and the dollar edged up after recent heavylosses as markets braced themselves for U.S. jobs data thatcould decide whether the Federal Reserve will start withdrawingits stimulus this year.

Investors were reluctant to make aggressive bets after U.S.stocks ended little changed, partly on concerns that equitieshave become overpriced after the S&P 500 index's run torecord highs last week.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.2 percent, dropping from a five-monthpeak. Technical charts indicated it remained in "overbought"territory, indicating there could be a further retreat.

Tokyo's Nikkei share average inched up 0.1 percentin light trade, while Australia's S&P/ASX 200 rose 0.4percent to a five-year high for a third day in a row and loggeda sixth day of gains, its longest such run since July.

Financial bookmakers expected major European indexes to open flat to modestly weaker.

Analysts polled by Reuters expect U.S. nonfarm payrolls tohave increased by 180,000 in September, with the jobless ratesteady at 7.3 percent. The data was delayed from Oct. 4 by the16-day U.S. government shutdown.

Many analysts expect the U.S. central bank to maintain its quantitative easing (QE) given the as-yet-unknown economicimpact of the shutdown and the possibility of another bitterbudget fight early next year. A strong employment report,though, could challenge that thinking.

"The common view in the market is that U.S. is essentiallytrapped in QE," said Andrew Quin, research strategy coordinatorat Patersons Securities in Perth.

"So at least until new debt ceiling negotiations get agreedprobably in February, we doubt they are going to do too muchwith QE between then and now."

A senior Fed official said it would be "tough" for the Fedto have sufficient confidence in the strength of the U.S.recovery by the time of its meeting in December to startreducing its $85 billion-per-month bond-buying programme.

DOLLAR FINDS SUPPORT

The dollar was up 0.1 percent at $1.3665 to the euro,off an eight-month low of $1.3704 marked on Friday, and gainedby similar margin against the yen, at 98.31 yen, addingto Monday's 0.4 percent bounce.

Against a basket of major currencies, the dollar added 0.1 percent.

"A (jobs) reading anywhere in the 160,000 to 190,000 rangewould probably be fairly neutral with respect to near-term U.S.dollar direction given the data pre-dates any impact from theOctober shutdown," BNP Paribas analysts wrote in a note.

"We remain short euro/dollar and sterling/dollar headinginto the release, looking for gradual improvement in U.S. data,"they said.

U.S. crude prices slipped 0.4 percent to below $99 abarrel, hitting a near four-month low and adding to the previoussession's 1.6 percent decline.

Gold softened a touch to around $1,313.6 an ounce.

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