GLOBAL MARKETS-Japan stocks extend falls; Swiss franc, yen up on safety flight
* Nikkei hits 2-wk low, Asian shares steady after Wed's tumble
* Dollar languishes near 2-yr low vs Swiss franc
* China HSBC flash PMI due out at 0145 GMT
TOKYO, Oct 24 (Reuters) - Japan's Nikkei fell to a two-week low on Thursday and the Swiss franc held near a two-year high against against the dollar, sparked by concerns about China's economic outlook.
On Wednesday, Chinese money-market rates rose to three-month highs after the central bank declined to inject cash for a second day as regulators showed signs of concern that loose liquidity might again be fuelling risky credit growth.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent, however, after shedding 0.9 percent on Wednesday to end a four-day winning streak.
The Nikkei share average dropped 0.6 percent as the yen gained ground on the dollar, extending the previous session's 2 percent slide. But a Tokyo-based equity trader at a foreign bank said some investors were picking up battered Japanese stocks.
Investors will get further clues to the health of the world's second-largest economy with a preliminary survey on Chinese manufacturing activity data due at 0145 GMT.
"The initial reaction to the rise in China's money market rates has translated into lower U.S. Treasury yields and weaker equity markets," analysts at BNP Paribas wrote in a note.
"The pullback in risk sentiment should remain temporary as the delay to the Fed's QE tapering plans until the first quarter of 2014 makes long carry positions attractive. This implies that commodity and emerging market currencies should regain the ground lost over the past 24 hours."
Before the concerns over China checked the market bullishness, global equity markets had been rallying after the resolution of the U.S. budget impasse and on expectations the Federal Reserve would extend its cheap money stimulus into 2014.
After a run of record highs, the U.S. Standard & Poor's 500 index fell 0.5 percent on Wednesday as shares of heavy-equipment maker Caterpillar and semiconductor companies tumbled after reporting earnings.
According to Thomson Reuters I/B/E/S, the one-month earning momentum for S&P 500 companies deteriorated to minus 3.6 percent from minus 1.5 percent last month.
U.S. S&P E-mini futures inched up 0.1 percent in Asian trade on Thursday.
The dollar was at 0.8919 franc, just above a two-year low of 0.8908 hit on Wednesday. It was holding at 97.46 yen , near a two-week low touched in the previous session.
Against a basket of major currencies, the dollar was little changed at 79.257, within striking distance from an eight-month low of 79.137 touched on Wednesday.
U.S. Treasury yields fell to three-months lows on more bets that the Fed will maintain its stimulus efforts into next year.
U.S. crude prices rose 0.5 percent to about $97.30 a barrel after falling to a 3-1/2 month low of $96.16 on Wednesday.