TOKYO (Reuters) - Asian shares fell after two strong days of gains on Thursday, as investors focused on meetings of the central banks of Japan, Britain and the euro zone for signs of more policy stimulus, while solid U.S. economic data underpinned the dollar.
Japan's Nikkei stock average was one major exception, soaring to its highest since late September 2008, cheered by another all-time high close for the blue-chip Dow Jones Industrial Average on Wednesday.
The dollar .DXY hovered near its highest since August 20 of 82.604 against a basket of key currencies hit on Wednesday, after the latest round of economic reports supported views of a steady recovery in the world's largest economy.
The MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.4 percent, having recouped much of its losses incurred on Monday when it tumbled to a nine-week low.
South Korean shares led the declines in the pan-Asian index, with a 0.7 percent drop as Seoul shares were dragged down by a near 2 percent plunge in market heavyweight Samsung Electronics after a run of recent gains.
Australian shares fell 0.4 percent after earlier touching a fresh 4-1/2-year peak.
Market players focused on the strength of the U.S. economy, with the dollar seen drawing further support after Washington avoided another partisan budget battle and a possible government shutdown.
By a vote of 267-151, the U.S. House of Representatives passed a measure to fund government programmes until the end of the fiscal year on September 30. The Democratic-controlled Senate is expected to pass a similar bill next week. Without such legislation federal agencies would run out of money on March 27.
"The dollar is taking centre stage and likely to become the sole winner because growth is solid while monetary conditions are lax, and stocks are renewing record highs," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
The Dow's rise was underpinned by better-than-expected private jobs data for February, raising some expectations the official non-farm payrolls report due on Friday could be relatively solid.
Separate data showed new orders for U.S. factory goods fell in January on weak demand for transportation equipment, but the underlying strength in manufacturing remained intact.
The Bank of Japan, the Bank of England and the European Central Bank will all announce their policy decisions later in the session, with investors expecting them to maintain or extend soft policy to support fragile economies.
Speculation that the ECB would signal future interest-rate cuts pressured the euro, which stood at $1.2992, after touching a three-month low of $1.29655 on Wednesday. The pound was down 0.1 percent at $1.4996, after falling to a 2-1/2-year trough of $1.4965 on Wednesday as markets positioned for more stimulus from the BOE.
The dollar eased 0.1 percent against the yen to 93.95, having touched a one-week high above 94 yen on Wednesday, taking it closer to a 33-month peak of 94.77 hit last week. Thursday's BOJ meeting is the last under the current order and investors are solely focused on whether the central bank will immediately launch extra reflationary steps when the new leadership takes over next month.
Japanese shares finally caught up with other major global stock index. By the end of 2009, both the benchmark U.S. Standards & Poor's index and Frankfurt's DAX had topped the levels of late-September 2008. The Nikkei's lagged performance underscored the depth of damage to the Japanese economy from the yen's consistent strengthening between 2009 and 2011.
"Strong U.S. data continue to support the risk rally and the USD," Barclays Capital said in a note, adding that the company remained bearish towards the yen over the medium term, given expectations for more monetary stimulus from the BOJ.
"The BoE's decision on QE (quantitative easing) is likely to be finely balanced; however, the event carries downside risks for the GBP. While our base case remains for ECB policy to be unchanged and little news from the press conference, the risks are skewed to the downside for the EUR," Barclays said.
U.S. crude was steady around $90.43 a barrel and Brent eased 0.1 percent to $110.96.
Spot gold nudged down 0.1 percent to $1,581.16 an ounce as signs of improvement in the U.S. jobs markets weighed on safe-haven demand.
Editing by Jacqueline Wong