TOKYO (Reuters) - The dollar clawed back ground against the yen and Japanese shares surged late in Wednesday's session, but stocks fell in much of Asia after U.S. sales data reinforced expectations that the Federal Reserve will soon pare its stimulus.
Financial spreadbetters expect Britain's FTSE 100 .FTSE to open 1 to 3 points higher, or as much as 0.05 percent; Germany's DAX .GDAXI to gain 8 to 9 points, or as much as 0.1 percent; and France's CAC 40 .FCHI to rise 2 to 3 points, or as much as 0.1 percent.
Data due later on Wednesday is expected to show that the euro zone economy moved out of its longest recession, eking out growth of 0.2 percent in the June quarter. The German economy grew by 0.7 percent in the second quarter of 2013, data on Wednesday showed, the largest expansion for Europe's biggest economy in more than a year.
The dollar rose about 0.2 percent to 98.41 yen, up from a session low of 97.87 yen and pulling away from a seven-week low of 95.810 hit last week.
Against a basket of major currencies, the dollar .DXY dipped slightly, while the euro rose about 0.1 percent to $1.3273, supported by the German economic data.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was flat, while the Korea Composite Stock Price Index (KOSPI) .KS11 added 0.6 percent and the Shanghai Composite Index .SSEC and was down 0.4 percent.
The Hong Kong stock exchange was closed on Wednesday due to Typhoon Utor.
Japan's benchmark Nikkei stock average .N225 erased losses and, in a late surge, gained 1.3 percent to a one-week closing high.
Tuesday's U.S. data showed retail sales excluding cars, gasoline and building materials rose 0.5 percent in July, the largest increase since December, reinforcing expectations the Federal Reserve could soon cut back quantitative easing.
"We think the Fed will start reducing quantitative easing in September unless we see surprisingly weak data, particularly on payrolls," said Shinichiro Kadota, FX strategist at Barclays in Tokyo.
Yields on benchmark U.S. 10-year Treasuries remained close to their highest levels in nearly two years, as investors prepared for a tapering of the Fed's $85 billion-a-month bond buying.
Atlanta Fed President Dennis Lockhart said it was too early to detail plans for a tapering, but did not rule out the possibility of it starting next month. His suggestion it would neither be sudden or drastic helped boost sentiment in U.S. stock markets, some of which carried into Asian trade.
Ahead of the U.S. sales data, European indicators on Tuesday painted a brighter picture. Germany's ZEW economic sentiment survey was upbeat and euro zone industrial output rose, while UK house prices increased at their fastest pace in seven years.
"The U.S. and European data offered evidence of an improving global economy, although they were not enough to provide a clear direction for the market, it will be enough to give it a push," said Ko Seung-hee, a market analyst at SK Securities in Seoul.
Later on Wednesday, U.S. wholesale price data is scheduled to be released, and Thursday will bring U.S. industrial production and consumer inflation reports. ECONUS
In commodities markets, copper rose 0.2 percent to$7,285.50 a ton. Gold slipped, last buying $1,320.51 per ounce.
Brent crude prices gave up 0.3 percent to $109.46 a barrel.
