* Trump flags big infrastructure spending ahead of Tuesday
* Hawkish comments from Fed's Kaplan underpin dollar
* Crude oil futures firm, gold retreats from 3-1/2-month
By Lisa Twaronite
TOKYO, Feb 28 Asian shares lost their grip on
Tuesday but were still on track for a winning month, bolstered
by gains on Wall Street as investors awaited a speech by U.S.
President Donald Trump for signals on tax reform and
In Europe, Germany's DAX and Britain's FTSE
were expected to open higher.
MSCI's broadest index of Asia-Pacific shares outside Japan
erased earlier modest gains and edged down
slightly by mid-afternoon. But it was still up more than 3
percent this month and more than 9 percent for the year so far.
On Monday, U.S. stocks edged up, with the Dow Jones
Industrial Average closing at a record high for a 12th
straight session, after Trump said he would talk about plans for
"big" infrastructure spending in his first major policy address
to Congress on Tuesday (9 pm ET Feb 28/0200 GMT on March 1).
"Twelve in a row and counting as the Dow closed higher for
yet another consecutive record close, as well as new record
highs for both major U.S. benchmarks, and this looks set to
translate into a positive European open this morning," wrote
Michael Hewson, Chief Market Analyst at CMC Markets UK.
Australia's S&P/ASX 200 index erased gains and ended
down 0.2 percent, while China's Shanghai Composite Index
was up 0.1 percent.
Japan's Nikkei stock index pared its gains but still
ended up 0.1 percent, up 0.4 percent for February and nearly
flat for the year to date, as investors awaited Trump.
"This could be like the case of his inauguration speech, in
which expectations were high, but he didn't come up with any
concrete details," said Ayako Sera, market strategist at
Sumitomo Mitsui Trust Bank.
"The market does not want a repeat of that, and wants to
hear some actual plans, or there will be disappointment," she
Treasury Secretary Steven Mnuchin said in a televised
interview on Sunday that Trump will use the event to preview
some elements of his sweeping tax reform plans.
Trump will seek to boost Pentagon spending by $54 billion in
his first budget proposal and slash the same amount from
non-defense spending, including a large reduction in foreign
aid, a White House budget official said.
The dollar slipped 0.3 percent to 112.43 yen but
still held above Monday's nadir of 111.920, which was its lowest
since Feb. 9. The euro was up 0.1 percent on the day at $1.0599
Hawkish comments from a U.S. Federal Reserve official also
bolstered U.S. Treasury yields and underpinned the dollar.
Dallas Fed President Robert Kaplan said on Monday that the
Fed might need to raise interest rates in the near future to
avoid falling behind the curve on inflation.
The yield on benchmark 10-year U.S. Treasuries, which had
slumped to more than five-week lows last week, stood at 2.363
percent in Asian trade, not far from their U.S.
close of 2.367 percent on Monday.
Crude oil prices were largely steady, as expectations of
higher U.S. crude production offset reports of high compliance
with OPEC's production cut agreement.
U.S. crude was up 0.3 percent on the day at $54.20
per barrel, while Brent crude added 0.4 percent to
Spot gold edged up 0.1 percent to $1,254.48 an ounce
but remained shy of a 3-1/2-month peak scaled on Monday as
investors awaited Trump's speech.
(Editing by Kim Coghill)