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GLOBAL MARKETS-Asia shares slip on US tax uncertainty, sterling falls on doubts over May

From Reuters - November 12, 2017

TOKYO (Reuters) - Asian shares stepped back in cautious trade on Monday as investors look to see whether U.S. Republicans can hammer out a tax reform deal quickly, while the British pound fell on growing doubts over Prime Minister Theresa Mays leadership.

European shares are expected to be largely unchanged. Spread betters expect France's CAC .FCHI and Germany's DAX .GDAXI to open almost flat, while Britain's FTSE .FTSE is seen rising 0.3 percent from Friday's six-week low.

Tokyo's benchmark Nikkei .N225 dropped 0.9 percent, bringing down MSCI's Asia-Pacific Index .MIAP00000PUS 0.5 percent. Excluding Japan, shares in the region .MIAPJ0000PUS were down just 0.1 percent, with mainland Chinese shares .CSI rising as much as 0.6 percent to two-year highs.

The S&P 500 index .SPX had ended its eight-week winning streak By Friday's Wall Street close as investors took their profits after U.S. Senate Republicans had unveiled a new tax plan that differed from the House of Representatives' version.

There are few signs of a compromise yet, with the head of the House of Representatives tax-writing committee opposing a proposal from Senate Republicans that would hike taxes for some middle class Americans.

All eyes are on what the Senate and the House of Representatives will do on their tax bills, said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.

That there is debate is not surprising at all. Still, it is an uphill moment for markets, he said.

In the currency market, the dollar was also shackled by the uncertainty over the fate of the tax cut plans.

The euro EUR= traded at $1.1647, down slightly after showing its first weekly gain in four weeks last week.

The dollar fetched 113.42 yen JPY=, more than a full yen below its near seven-month high of 114.735 yen touched a week ago.

The British pound GBP=D4 came under renewed pressure, slipping 0.5 percent to $1.3120 after the Times newspaper reported on Sunday that 40 Conservative lawmakers had agreed to sign a letter of no confidence in May.

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