By Lisa TwaroniteTOKYO (Reuters) - Oil prices were knocked again on Wednesday, with Asian shares and the dollar also pulling back as global growth concerns and political uncertainty in Greece prompting a flight to safety.MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.4 percent, while Japan's Nikkei stock average was down more than 1 percent.A Japanese government survey released before the market opened showed big Japanese manufacturers grew less optimistic in October-December and they see conditions worsening further in the following quarter, suggesting that the economy is slow to recover from a recession.U.S. crude futures were down more than 1 percent at $63.12 a barrel. Oil prices have been under pressure amid a massive supply glut, after OPEC decided against an output cut.Adding to pressure on crude prices, the American Petroleum Institute, an industry group, reported a 4.4 million barrel build in crude stockpiles last week when analysts had predicted a drop. [API/S]European political woes added to the gloomy mood. Greek shares and sovereign bond markets plunged after the government in Athens brought forward a presidential vote that heightened uncertainty over the country's transition out of its IMF/EU bailout.World markets have been buffeted in recent months on signs of weakening global growth, with a rout in oil prices in particular triggering a bout of volatility."Volatility surged, most equity markets were routed and a number of consensus trades shaken in London/New York," Sean Callow, a currency strategist at Westpac, said in a note. "U.S. interest rates fell on safe-haven demand for Treasuries and the U.S. dollar followed suit."The yield on benchmark 10-year notes stood at 2.221 percent, not far from its U.S. close of 2.220 percent on Tuesday.The dollar was down about 0.1 percent on the day at 119.52 yen , after shedding more than 2 percent at one point on Tuesday to trade as low as 117.90 yen. The greenback marked a seven-year high of 121.86 yen on Monday.The euro was up about 0.1 percent at $1.2381 .A selloff in Chinese shares on Tuesday also dragged down global sentiment. China's official bond clearing house also rattled markets by tightening collateral rules. It excluded about 500 billion yuan ($81 billion) worth of corporate bonds from being used for bond repurchase agreements.On Wall Street overnight, major indexes ended lower, though the S&P 500 was nearly flat.(Editing by Shri Navaratnam)Join the conversation about this story »
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