GLOBAL MARKETS-Asian shares fall on Greece, global outlook

* Asian stocks surrender initial gains on

* Euro slips as caution over Greece remains

* Dollar at a 3-month low against yen

By Umesh Desai

HONG KONG, March 4 (Reuters) - Asian shares failed to hold on to their early gains on Thursday, slipping into negative territory as worries about Greece and the outlook for the global economy made investors cautious.

Confidence ebbed ahead of the key monthly U.S. nonfarm payrolls report on Friday. Analysts predict that recent U.S. Northeast snow storms have affected Friday's data but caution against reading too much into it.[ID:nN03225657]

The worries were also reflected in European stock markets which were expected to open weaker.

Two key central bank decisions are expected on Thursday. The European Central Bank is set to hold interest rates at a record low of 1.0 percent and the Bank of England is expected to keep interest rates at 0.5 percent, also a record low.

Euro STOXX <STXEc1> futures, Germany's DAX futures <FDXc1> and France's CAC-40 futures <FCEc1> were down between 0.8 percent and 1 percent.

The euro initially rose against the dollar after Greece's planned pay cuts and tax hikes to reduce its deficit [ID:nLDE622155] but slid later as investors sought safe-haven assets. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Reuters Insider on euro: http://link.reuters.com/zad33j ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

The MSCI index of Asian shares outside Japan <.MIAPJ0000PUS> was down 0.5 percent on worries about the robustness of the global economic recovery and doubted the debt crisis in Europe would end immediately.

The MSCI index is down about 3 percent to date as sovereign debt worries, jitters about stimulus withdrawal and a patchy economic picture hurt risk appetite.

"The rally was not very strong, most probably just a little bit of short covering at the open. There are remining concerns over the Greek sovereign debt situation," said Andrew Sullivan, a sales trader with broker MainFirst Securities in Hong Kong.

He added investor worries have remained after data showed lending by China's top banks was down substantially on the month in February as it showed the slowing measures being implemented were having an impact. [ID:nLDE62102N]

Hong Kong's benchmark Hang Seng Index <.HSI> was down 1.2 percent, while Shanghai shares <.SSEC> fell 2.4 percent, the biggest percentage fall in five weeks, with investors waiting for clues from China's annual parliamentary meetings on measures to support industry.

The dollar fell to its lowest level in three months against the yen as declines in regional stocks prompted a cutback in risky asset positions.

The yen's strength sparked worries for exporters in Japan with the Nikkei average down over 1 percent reversing early gains made on the back of mining stocks.

Miners like Japan's Sumitomo Metal Mining <5713.T> and Australia's BHP Billiton <BHP.AX> and Rio Tinto <RIO.AX> which were earlier spurred higher by copper's jump to a seven-week high, retreated after supply worries about the metal faded with top producer Chile emerging mostly unscathed from an 8.8-magnitude weekend earthquake.

Overnight, U.S. stocks ended on a mixed note with concerns about bank regulation and a setback for drug company Pfizer <PFE.N> doused to some extent by the upbeat data from the labour market and services sector.

The main focus for investors will be Friday's Labor Department data on unemployment in February.

Overnight, Greece announced plans for a further $6.5 billion in pay cuts and tax hikes to reduce its deficit. [ID:nLDE622155]. The EU endorsed the Greek plan but Germany stopped short of committing to explicit financial support. [ID:nLDE6220NA].

Although market pressure on Greece has eased in recent days, a Reuters poll of economists showed on Tuesday that scepticism about the government's ability to meet a goal to slash its deficit by four percentage points this year still runs deep.

Only 18 of 47 respondents said they believed Athens would meet that target. [ID:nLDE6220N6]

"There are still doubts whether Europe as a whole will be able to go through this relatively well because other countries in the region are also in quite difficult fiscal situations," said Nicholas Yeo, investment manager at Aberdeen Asset Management.

Spot gold <XAU=> slipped on profit taking after the metal hit a 6-½ week high the previous day following Greece's new measures.

The euro fell from an intraday peak of $1.3712 to trade as low as $1.3645. After the initial relief over Greece it had risen to as high as $1.3736 the previous session, with some stops triggered at $1.3700.

Earlier this week, the euro had hit a 9-1/2-month low of $1.3432 on worries about the euro zone.

Economists are concerned about which euro area member might be the next troubled spot and only five of 65 economists now expect the euro/dollar to reach $1.50 in the next 12 months, compared to 15 of 62 in last month's poll.

In contrast, 33 of 65 see the euro at or below $1.30 in the coming year, compared to just 11 of 62 in the February poll.