Asia stocks down but Japan bucks trend as yen slides

TOKYO (Reuters) - Asian stocks mostly fell on Thursday apart from Tokyo, where shares bucked the downward trend and rose in reaction to a further weakening in the yen.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3 per cent, with an extended decline in oil and other commodity prices continuing to bite.

For short-term cues, Asian markets were awaiting the China flash November PMI number, a private sector reading of the country's manufacturing sector activity, due at 0145 GMT. Recent data have shown that economy lost momentum heading into the fourth quarter.

Tokyo's Nikkei gained 0.4 per cent, leaving it not far from the seven-year high touched the previous week. There was little reaction to stronger-than-expected October exports.

The US dollar hovered close to a new seven-year peak of 118.275 yen reached early in the session.

The U.S. currency rallied 1 per cent overnight, buoyed after the minutes of the Federal Reserve's last policy meeting showed the members were relatively unconcerned about the dollar's strength.

"The Fed has left the green light shining brightly for further USD gains," said Alan Ruskin, global head of currency strategy at Deutsche.

The dollar was also aided as the Fed minutes showed the central bank was still on track to hike interest rates next year, which pushed U.S. Treasury yields higher.

The Fed's hints of confidence toward by the economy further highlighted the divergence in U.S. monetary policies relative to those of Europe and Japan, where the European Central Bank and the Bank of Japan are struggling to stave off deflation and shore up their shaky economies.

Beaten down by the dollar, the yen also slid against the euro. The euro traded near a six-year peak of 148.25 yen .

In commodities, gold remained under pressure after falling more than 1 per cent on Wednesday after a poll showed weaker support among Swiss voters for a referendum that would require the Swiss National Bank to boost its gold reserves.

If the "Save our Swiss gold" proposal is approved, the SNB would be banned from selling any of its gold reserves and would have to hold at least 20 per cent of its assets in the metal, compared with 7.8 percent last month.

Spot gold was at US$1,182.50 an ounce, easing back from the week's high of $1,204.70 struck on Tuesday.

U.S. crude oil futures extended losses as the bullish dollar and an unexpected rise in U.S. stockpiles cancelled out hopes of a possible OPEC output cut.

U.S. crude was down 30 cents at US$74.28 a barrel.