* Euro holds near 8-month high vs dollar, eyes 2013 peak
* Nikkei hits a 4-week low, BOJ more upbeat on capex
* Asian shares dip, Samsung Elec Q3 guidance topsexpectations
By Dominic Lau
TOKYO, Oct 4 (Reuters) - Asian stocks were pegged back onFriday, with Japanese shares hitting a four-week low and thedollar languishing around an eight-month trough as the U.S.budget standoff dragged on, building fears of increasinglyserious economic consequences.
Tokyo's Nikkei fell 0.7 percent after shedding as much as1.5 percent to its lowest since Sept 6, taking its cue from theU.S. S&P 500, which suffered its ninth loss in 11sessions overnight.
Financial bookmakers expected European shares to openmodestly weaker.
"Market unease will likely remain while the fiscal strugglecontinues to dominate headlines, especially as the second, andmore important, deadline of U.S. default gets closer," CreditAgricole said in a note to clients.
President Barack Obama met Republican and Democrat leadersin Congress but reiterated in a speech that he would not give into Republican demands to roll back his healthcare programme inexchange for reopening the government.
The debt ceiling is far more important than a partial U.S.government shutdown, which began on Tuesday, since it could leadto an unprecedented default by the United States, an outcome themarket assumes is unthinkable.
BNP Paribas analysts said it was increasingly possible thatthe standoff in Washington would continue until the debt ceilingdeadline on Oct. 17.
"Market reaction is likely to intensify going into that datehowever, with the dollar extending its slide versus yen, Swissfranc and the euro," they wrote in a note.
"The silver lining for the dollar is that it is alreadytrading at a sizeable discount relative to short-term rates,suggesting that there will be plenty of scope for the dollar torally on any positive outcome in Washington."
The shutdown has delayed the closely-watched nonfarmpayrolls data, normally out on Friday. The data is a key factor for the Federal Reserve to consider when deciding to scale backits stimulus.
Two senior Fed officials warned on Thursday of damagingconsequences if the country defaults on its debt and said U.S.monetary policy is being kept easier to help offset the harmcaused by the political wrangling in the Capitol Hill.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent. Seoul shares slipped0.1 percent, though Samsung Electronics Co Ltd added0.5 percent after the index heavyweight estimated itsJuly-September earnings rose 25 percent to a record $9.4billion.
Currency dealers said they suspected that South Koreanauthorities intervened in the foreign exchange market, buyingdollars to push the Korean won off what was its strongestlevel in more than eight months.
The dollar was also hurt by slower growth in the U.S.services sector in September.
EURO LOOKING UP
The euro was steady at $1.36255, not far from aneight-month high of $1.36465 touched on Thursday. The commoncurrency was also aided by the European Central Bank's apparentlack of concern over the euro's recent strength andbetter-than-expected euro zone data.
"The euro has become an island of stability in global assetmarkets ... Peripheral yields are higher and more stable than inthe U.S. and equity markets keep outperforming," Citigroup saidin a report.
"However, we would emphasise the euro's rally as a functionof improved capital market conditions, rather than fundamentals,and expect it will be fragile if these capital marketsconditions change."
Against a basket of major currencies, the greenback was near an eight-month trough.
The dollar eased 0.2 percent on the day to 97.105 yen, after hitting a five-week low of 96.93 on Thursday, asthe Bank of Japan stood pat on monetary policy as expected.
The BOJ revised up its assessment on capital expenditure,encouraged by growing signs that the benefits of its stimuluspolicy are broadening.
Brent crude slipped 0.2 percent to around $108.8 abarrel, adding to a 0.2 percent decline overnight, as the slowerservice sector growth in September compounded worries about rawmaterials demand due to the U.S. budget crisis and governmentshutdown.
Copper prices stabilised after tumbling 1.3 percenton Thursday.
- Budget, Tax & Economy
- government shutdown