GLOBAL MARKETS-Asian shares, sterling falter as Brexit, growth anxiety sap confidence

* MSCI Asia ex-Japan, Nikkei both barely lower
* Investors await central bank decisions, key data
* Sterling weaker after PM Johnson election call
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Andrew Galbraith
SHANGHAI, Oct 25 (Reuters) - Asian shares wobbled on Friday
as investors were reluctant to make big bets ahead of key
central bank policy meetings next week against the backdrop of
slowing global growth, while sterling extended its slide on a
fresh bout of Brexit anxiety.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was down just 0.03%, giving up small gains early
in the day.
Chinese blue chips .CSI300 were up by less than 0.1% and
Hong Kong's Hang Seng .HSI fell 0.4%. Shares in South Korea
.KS11 were also treading water.
Japan's Nikkei .N225 was a touch lower, while the
Australian share market .AXJO was a rare bright spot, adding
0.66% following on from gains on Wall Street.
The British pound, which had fallen 0.51% on Thursday after
British Prime Minister Boris Johnson's call for a general
election on Dec. 12, extended its slide, edging down 0.07% to
$1.2841.
Johnson conceded on Thursday for the first time that he
would not meet his "do or die" deadline to leave the European
Union next week. The continued uncertainty over Brexit comes against the
backdrop of persistently sluggish global growth.
New orders for U.S.-made capital goods fell more than
expected in September and shipments also declined, in a sign
that business investment remains soft. A Reuters poll of economists in recent weeks showed that
most think a steeper decline in global growth is more likely
than a synchronised recovery, despite central bank easing.
In his last meeting as president of the European Central
Bank, Mario Draghi left ECB policy and guidance unchanged, but
advised his successor to "never give up" on propping up the
eurozone economy in the face of a worsening outlook. The major focus for investors is next week's U.S. Federal
Reserve policy meeting at which it's almost certain to cut
interest rates for a third time this year. "It's less about the Fed going to cut, it's more about if
they're going to signal the pace, the magnitude of cuts", said
Kay Van-Petersen, global macro strategist at Saxo Bank in
Singapore.
Investors will also scrutinise a raft of data that will
follow the Fed decision, he said. "It's really all about next
week."
The Bank of Japan is also set to meet for a two-day meeting
ending Oct. 31. The decision is expected to be a close call,
though sources told Reuters the BOJ is leaning towards keeping
monetary policy steady amid relatively stable markets and a lull
in U.S.-China trade tensions. On Wall Street, strong quarterly results from Microsoft
MSFT.O and PayPal PYPL.O helped lift the tech-heavy Nasdaq,
which closed up 0.81% at 8,185.80.
The S&P 500 .SPX also rose, gaining 0.19% on the day, but
the Dow Jones Industrial Average .DJI finished 0.11% lower at
26,805.53, weighed down by 3M MMM.N after the company cut its
full-year earnings forecast. Overall, however, investors remain cautious despite the
gains in risk assets in recent weeks, supported by apparent
progress in Brexit negotiations and China-U.S. trade talks.
"On the whole, we conclude that we have not entered into a
new 'risk on' phase from a broader trend perspective just yet,"
said George Davis, chief technical strategist at RBC Dominion
Securities.
Investors are also nervous ahead of a summit in Chile where
U.S. President Donald Trump hopes to finalise a partial trade
deal with his Chinese counterpart Xi Jinping.
Rattling confidence was a speech by U.S. Vice President Mike
Pence on Thursday, which criticised China's handling of the Hong
Kong protests and its treatment of Muslim Uighurs in the
Xinjiang region. Those comments sent the S&P 500 index briefly
lower. The yield on benchmark 10-year Treasury notes US10YT=RR
fell to 1.7537% on Friday compared with its U.S. close of 1.766%
on Thursday. The two-year yield US2YT=RR , which rises with
traders' expectations of higher Fed fund rates, was at 1.5737%,
down from a U.S. close of 1.582%.
Expectations that the Fed will cut rates had helped to lift
gold prices, but the precious metal XAU= was lower on Friday,
losing 0.05% to $1,502.43 per ounce. GOL/
The dollar was slightly higher against the yen at 108.65
JPY= and the euro EUR= was little changed on the day at
$1.1101.
The dollar index .DXY , which tracks the greenback against
a basket of six major rivals, nudged 0.07% higher to 97.701.
Oil prices were lower after rising on Thursday on a surprise
drop in U.S. crude inventories and the hopes for
market-supporting actions by OPEC and its allies.
West Texas Intermediate (WTI) crude CLc1 was down 0.57% to
$55.91 a barrel, and global benchmark Brent crude LCOc1 dipped
0.55% to $61.33 per barrel.