GLOBAL MARKETS-Shares fall for 3rd straight day; yen at 10-week high
* Nikkei tumbles more than 6 percent, European shares fall 1 percent
* Strong U.S. retail sales, claims data help Wall Street recover
* Dollar slides to lowest vs yen since BOJ easing in early April
NEW YORK, June 13 (Reuters) - Global stock markets fell for a third straight day on Thursday and the U.S. dollar hit a 10-week low against the yen as investors unwound bets linked to central bank stimulus measures that have buoyed many asset markets. But Wall Street rebounded after the open and oil prices also recovered, helped by stronger-than-expected U.S. data on retail sales and jobless claims. Investors are trying to gauge when central banks around the world, particularly the Federal Reserve, which meets next Tuesday and Wednesday, will pull back on their accommodative monetary policies. Concern about a pullback in central bank liquidity mounted after recent comments from Federal Reserve Chairman Ben Bernanke and a decision by the Bank of Japan to hold off on easing further. It has fueled a selloff in global equities, emerging markets, bonds and commodities, while driving the yen sharply higher. "The easy money helped us on the way up. The concern is mounting it's going to end," said Andre Bakhos, director of market analytics at Lek Securities in New York. "The action has been choppy and erratic," he said. "It's a case of investors looking to limit exposure ahead of next week's Fed meeting." The MSCI All-Country World Index fell 0.4 percent to 360.41, while emerging equities hit 11-month lows. Most emerging currencies remained under heavy pressure, with the Indian rupee falling to a record low.
The Dow Jones industrial average rose 33.79 points, or 0.23 percent, at 15,029.02. The Standard & Poor's 500 Index was up 4.99 points, or 0.31 percent, at 1,617.51. The Nasdaq Composite Index was up 9.66 points, or 0.28 percent, at 3,410.09. European shares fell as much as 1.1 percent before recovering slightly, while Japan's Nikkei fell 6.4 percent - its second-biggest daily drop in more than two years. That rattled markets and left Asian shares at their lowest level of the year. The dollar lost 1.8 percent against the yen as investors spooked by Japan's stock dive unwound bets the yen would weaken. It fell as low as 93.78 yen, its lowest since April 4, giving back almost all the gains made since the Bank of Japan's aggressive monetary easing was announced on that day. The euro lost 0.4 percent to $1.3281. "If you look at it historically, there has never been a period when the Fed has started to take back stimulus that has left the markets untouched," said Hans Peterson, global head of investment strategy at Swedish bank SEB. "And this time it is a bigger exercise. We have moved markets from 2009 to 2013 on stimulus and now we are trying to take a step into a world which is more driven by natural growth. That transition will not be easy."
Brent crude rose 19 cents to $103.68 a barrel, having traded as low as $102.75 on reports indicating weak demand, including a cut in the outlook for global economic growth by the World Bank. U.S. crude fell 0.22 percent to $95.67 a barrel. Investors headed for traditional safe-haven government debt. The benchmark 10-year U.S. Treasury note was up 9/32, the yield at 2.1956 percent. German government bonds had their biggest gains in a week. The recent selling of euro zone periphery debt also resumed , and Italy's borrowing costs rose at an auction of three-year debt, although yields at a parallel 15-year sale were little changed.