Japanese stocks tumble as yen hovers near four-week high

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TOKYO (Reuters) - Asian shares came under pressure on Tuesday, with Japanese stocks tumbling more than 2 percent as the yen hovered near a four-week high against the dollar after last week's surprisingly weak jobs report raised concerns about the U.S. growth outlook.

Tokyo's Nikkei benchmark .N225 shed 2.6 percent, hitting a one-month low as investors there caught up to the fallout from the nonfarm payroll report following Monday's public holiday in Japan.

The Nikkei, like Wall Street, has got off to a slow start to the year after a stellar 2013, with a 57 percent jump.

"Given the extent of positions in the market and continued softness in U.S. yields this week, USD/JPY could continue to test lower near-term," analysts at BNP Paribas wrote in a note.

"However, bearish JPY remains a high conviction view for many market participants and we expect the pair to find buying interest ahead of 101.50," they added.

While the weak U.S. jobs report raised doubts about how quickly the Federal Reserve would scale back its stimulus, it also stoked concerns about the pace of recovery in the world's largest economy.

The announcement of a $13.6 billion deal by Japan's Suntary Holdings Ltd SUNTH.UL to buy U.S. spirits company Beam Inc (BEAM.N) may offer some support to the dollar versus the yen.

Dollar/yen was one of the strongest-performing major currency pairs last year, and many hedge funds have been betting the trend will continue as the Federal Reserve cuts back its huge bond-buying programme while the Bank of Japan remains committed to providing stimulus.

The dollar was steady at 103.05 yen, having fallen 1.1 percent overnight, its biggest one-day slide since September 18. A stronger yen tends to erode the competitive edge of Japanese exporters abroad and their dollar earnings when repatriated.

Against the Australian dollar, the greenback languished near a four-week low of $0.9053. The euro was little changed at $1.36665, however.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.3 percent after gaining 0.8 percent in the previous session as the disappointing U.S. jobs report added to the case for the Fed to keep rates low for longer.

Overnight, U.S. stocks tumbled on caution ahead of corporate results, as mounting negative pre-announcements left a lackluster profit growth outlook, with the Standard & Poor's 500 .SPX off 1.3 percent.

According to Thomson Reuters, almost 10 out of every 11 earnings pre-announcements for the current reporting season from S&P 500 companies have lowered estimates.

U.S. banks are in the spotlight this week, with JPMorgan Chase & Co (JPM.N), Bank of America (BAC.N), Citigroup (C.N) and Goldman Sachs (GS.N) reporting quarterly earnings.

Among commodities, gold hovered near a four-week high at $1,253.40 per ounce, having gained 0.5 percent overnight to extend Friday's 1.6 percent rally following the disappointing U.S. employment report.

U.S. crude futures dipped 0.1 percent to $91.67 a barrel, adding to Monday's 1 percent drop after news of a deal between Western powers and Iran to curb the OPEC country's nuclear programme and as production resumed from Libya and a key North Sea oilfield.

(Editing by Shri Navaratnam)

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