Asia shares subdued by Greek anxiety, dollar stands tall

TOKYO (Reuters) - Asian stocks were subdued on Thursday as Greece's refusal to back down in a standoff with its creditors kept most markets on edge, while the dollar got a boost from upbeat U.S. economic indicators.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> stood flat. Tokyo's Nikkei <.N225> climbed 1.3 percent thanks to a weaker yen, while South Korea's Kospi was flat <.KS11>.

Investors remained nervous with Greece's debt crisis unlikely to be resolved before Sunday's referendum. Prime Minister Alexis Tsipras on Wednesday urged Greeks to reject an international bailout deal, souring hopes of any breakthrough.

Adding to the gloom in the euro zone, markets in Asia will be watching out for any further ructions in China's stocks which dived on Wednesday after a bounce the previous day.

China's securities regulator said on Wednesday it has relaxed rules on margin calls, and expanded brokerages' financing channels, in Beijing's latest efforts to stem further slides in China's stock market.

Trading on Wall Street mirrored investor frustration with the Greek crisis as U.S. stocks trimmed intraday gains as it Athens refused to soften its stance on bailout terms with its creditors.

"July 5th (day of Greek referendum) is the next key date for the euro and after that July 20th, when Greece owes the European Central Bank 3.5 billion euros," Kathy Lien, managing director of FX Strategy for BK Asset Management, wrote.

"If this payment is missed, the ECB will most likely pull the plug on liquidity to Greek banks, which would have a more dramatic impact than the latest default, leading to increased uncertainty for Greece, the euro and the financial markets as a whole."

The euro remained under the gun after unwinding earlier gains that were driven by hopes of a Greek resolution.

The common currency's fall was exacerbated by strong U.S. data, which pushed Treasury yields higher and underpinned the dollar.

The ADP National Employment report on Wednesday showed 237,000 private-sector U.S. jobs were created in June, handily exceeding the median expectation among economists surveyed by Reuters for a gain of 218,000. Construction spending in May was equally strong, hitting the highest level since October 2008.

Investors are now awaiting another batch of U.S. data from durable goods to nonfarm payrolls ahead of a holiday on Friday, in observance of the July 4 Independence Day.

The euro was down 0.1 percent at $1.1043 after losing 0.9 percent on Wednesday. The euro has lost about 1.1 percent so far this week.

The dollar was also up against the yen, gaining 0.1 percent to 123.27 and hovering near a one-week high.

In commodities, U.S. crude steadied somewhat after shedding 4 percent overnight on data showing stockpiles in the United States rose for the first time in more than two months. [O/R]

U.S. crude was little changed at $56.95 a barrel.

(Editing by Shri Navaratnam)

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