Asia stocks flat in muted session, dollar recovers some losses

SINGAPORE, Dec 27 (Reuters) – Asian stocks were little changed on Tuesday, in thin trade and with little to guide them as most major markets were closed on Monday for Christmas holidays, while the dollar reclaimed some of its losses from Monday.

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, with Australia closed.

Japan’s Nikkei was also unchanged.

On Friday, Wall Street closed slightly higher in thin trade.

The 10-year U.S. Treasury yield was up 0.15 percent on Tuesday, after slipping 0.5 percent on Monday.

That came after data on Friday showed U.S. consumer spending increased modestly in November as household income failed to rise for the first time in nine months. The data suggested the economy slowed in the fourth quarter after growing briskly in the prior period.

Still the slowdown in growth is likely to be temporary, with the labour market near full employment, house prices rising and the stock market has rallied close to record highs. In addition, consumer confidence is at the highest level since July 2007.

European stocks were little changed on Friday, although banks rose after Deutsche Bank and Credit Suisse settled investigations into U.S. mortgage securities sales, while Italy’s government approved a bailout for the nation’s largest lender, Monte dei Paschi.

"Shares are overbought and due for a bit of profit-taking but moves toward a resolution of bank woes are helping in Europe, global economic data is mostly good and the period around Christmas/New Year is normally positive for shares," Shane Oliver, head of investment strategy at AMP Capital in Sydney, wrote in a note.

The dollar rose 0.2 percent to 117.27 yen early on Tuesday, after slipping 0.2 percent on Monday on the pullback in U.S. yields.

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The Japanese currency showed little reaction to data on Tuesday showing the nation’s core consumer prices declined for the ninth straight month in November, and that household spending fell even as job availability hit a fresh 25-year high.

The dollar index, which tracks the greenback against a basket of six global peers, was little changed early on Tuesday, inching down 0.6 percent from the highest level since December 2002 hit last week.

The euro was flat at $1.045 on Tuesday.

In commodities, oil prices extended gains, on expectations of output cuts by both OPEC and non-OPEC producers.

U.S. crude added 0.3 percent to $53.18 a barrel early on Tuesday.

Gold edged down 0.1 percent to $1,132.50 an ounce as the dollar climbed.

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