Dollar at 20-mth low vs euro, Asia shares fall

SINGAPORE, Dec 4 (Reuters) The dollar fell to a fresh 20-month low against the euro on Monday, carrying over its weakness from last week, while Japanese government bond futures rose to a nine-month high as interest rate fears eased.

Asian share markets fell across the board, with Japan's Nikkei average dropping 0.32 percent in the morning session as investors sold exporters such as Kyocera Corp. following a dip on Wall Street and amid concerns over a stronger yen.

MSCI's broadest index of shares elsewhere in Asia was off 0.3 percent at 0230 GMT.

Oil prices were flat after last week's near-7 percent rally when Saudi Arabia's oil minister said output should be cut because of high U.S. fuel stocks and following the first big U.S. winter snowstorm.

The U.S. currency fell against the euro after weak U.S. factory data reinforced expectations for Federal Reserve rate cuts next year.

The euro stood at $1.3331 a touch below a 20-month high of $1.3367 in early trade, according to Reuters data.

The dollar had slumped to a 14-year low against the British pound on Friday after the Institute for Supply Management's survey of U.S. national manufacturing in November showed its key index at its lowest point since April 2003.

''The bad numbers came at a time when market sentiment was tilted toward selling dollars,'' said a senior trader for a foreign investment bank in Tokyo.

''It helped accelerate the selling,'' the trader said, adding that the dollar could see further declines after falling below 115 yen for the first time in nearly four months on Friday.

The dollar stood at 115.45 yen around the same mark from late U.S. trading on Friday.

The JGB market kept a bullish tone from last week, when softer consumer price data scaled back expectations for a Japanese interest rate increase as early as this month, after new data reaffirmed such speculation, analysts said.

''There is generally a feeling that business activity is approaching a peaking-out, which will make it difficult for the BOJ to raise interest rates,'' said Takeo Okuhara, a bond strategist at Daiwa Institute of Research.

The 10-year yield fell 1.5 basis points to 1.585 percent the lowest since early March. Earlier, December 10-year futures hit a nine-month high of 135.66 EXPORTERS FALL In Japan, electronics parts maker Kyocera gave up 1.3 percent and stocks in other exporters also fell, with Honda Motor Co. Ltd.

losing 1.5 percent and Sony Corp. shedding 1.9 percent.

Exporters also dragged down the KOSPI in Seoul, with LG.Philips LCD Co. Ltd. and Hyundai Motor Co., the country's top automaker, marked lower.

The main indexes in Australia, Taiwan and Hong Kong were also trading lower.

U.S. crude was flat at $63.42 a barrel. Since hitting a 17-month low of $54.86 on Nov. 17, oil prices have rallied almost 16 percent.

Gold rose on the back of the weaker dollar. Spot gold traded at $647.10/648.10 an ounce at 0240 GMT, higher than $645.20/646.20 an ounce late in New York on Friday.

REUTERS LL RN0953