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SINGAPORE (Reuters) � Stocks edged lower throughout Asia on Tuesday following the lead of U.S. markets while the dollar found support on suggestions Japan's central bank might act to ease monetary policy and push down the yen.

Currency markets also remained anxious about the prospects for new Japanese intervention and gold held near record highs.

U.S. and European stock markets dipped as investors grew nervous after four weeks of gains and increasingly wary of European debt challenges, particularly those facing Ireland and Portugal.

The Wall Street Journal reported that Federal Reserve officials were considering a more open-ended smaller-scale bond buying program than was the case in 2009. Traders said that prompted a dip in U.S. treasuries and could offer the dollar some support.

Japan's Nikkei average (.N225) fell 0.6 percent, dropping as the deadline passed for investors to receive dividends on Tokyo stocks for the financial half year.

The yen hovered for a time near its highest level since Tokyo's heavy intervention two weeks ago to sell the currency and depress it.

But sources said the Bank of Japan was considering whether to ease monetary policy further though it could delay action pending a consensus on how to keep economic recovery on track.

Talk of easing was having an effect as was the constant possibility of intervention.

"The market consensus is now that there won't be endless yen strengthening, that if the dollar falls below 84 yen authorities are likely to intervene," said Kenichi Hirano, operating officer at Tachibana Securities.

Korean stocks (.KS11) dipped 0.31 percent, while Australian stocks (.AXJO) were virtually unchanged.

Despite this month's gains, Tokyo stocks rose only some 1.6 percent this quarter, lagging other major stock markets. The S&P 500 has gained more than 10 percent this quarter, while South Korean shares have risen some 9.3 percent.

DOLLAR CLIMBS BACK

The dollar was trading at 84.20 yen at 0230 GMT, little changed from the New York close but up from levels around 84.11 -- its weakest point since the intervention.

The dollar index (.DXY) hit a seven-month trough of 79.19 on Monday, but climbed back in early Asia trade.

The Australian dollar was near two-year highs at $0.9601, while the euro stood at $1.3448, away from Monday's peak of $1.3507 following Moody's decision to cut its ratings on some lower-grade debt of Ireland's Anglo Irish Bank.

The downgrade rattled markets, further jolted by the main opposition party's pledge to seek an early election. The rising cost of rescuing the bank, nationalized during the banking crisis in 2009, has heaped pressure on Ireland's already strained state finances.

Gold slipped after hitting a lifetime high at $1,300 an ounce in the previous session as a rebound in the dollar prompted speculators to lock in gains. U.S. gold futures for December delivery dropped $4.1 an ounce to $1,294.5 an ounce.

Although lower prices could stir up purchases from jewellers, gold's failure to stay above Monday's peak could spur more selling from investors.

South Korean bonds reflected the upward trend and were poised for a third straight day of rises linked to doubts over worries on Irish debt.

Investors on Monday snapped up U.S. Treasury debt, driven by their desire for safer investments and healthy demand at an auction of new two-year government debt in the afternoon.

On Wall Street, the major U.S. stock indexes declined in spite of a flurry of corporate mergers and acquisitions.

Crude fell toward $76 ahead of U.S. reports expected to show fuel stockpiles rose in the world's top oil-consuming nation last week.

(Editing by Tomasz Janowski)

NEW YORK (Reuters) � JPMorgan Chase and Co (JPM.N) has told federal regulators it may seek to recoup the money it used to buy the banking assets of Washington Mutual Inc (WAMUQ.PK), the Wall Street Journal reported on Monday, citing people familiar with the situation.

JPMorgan has sent letters to the Federal Deposit Insurance Corp (FDIC), warning it could seek more than $6 billion in legal protection from the regulator's receivership, the Journal reported.

The FDIC seized Washington Mutual in September 2008 and sold its assets to JPMorgan for about $1.9 billion.

Earlier this month, the court-appointed examiner investigating the collapse of Washington Mutual was given several more weeks to complete his probe, a move that could delay the company's exit from bankruptcy.

JP Morgan did not include specific dollar requests in its letters, but it submitted lawsuits related to Washington Mutual and expects the FDIC receiver to absorb any losses resulting from them, a person familiar with the matter told the Journal.

JPMorgan Chase spokesman Joseph Evangelisti declined to comment on Monday.

(Reporting by Maria Aspan; Editing by Valerie Lee)

WASHINGTON (Reuters) � President Barack Obama signed a $30 billion small business lending bill into law on Monday, claiming a victory on economic policy for his fellow Democrats ahead of November congressional elections.

The law sets up a lending fund for small businesses and includes an additional $12 billion in tax breaks for small companies.

"It was critical that we cut taxes and make more loans available to entrepreneurs," Obama said in remarks at the White House. "So today after a long and tough fight, I am signing a small business jobs bill that does exactly that."

Obama is trying to show voters, who are unhappy about 9.6 percent unemployment, that he and his party are doing everything they can to boost the tepid U.S. economy.

Democrats said they backed the bill because small businesses had trouble getting loans after the financial crisis that began in December 2007. They estimate the incentives could provide up to $300 billion in new small business credit in the coming years and create 500,000 new jobs.

Republicans characterized the bill as a smaller version of the unpopular Wall Street bank rescue effort and blocked it in the Senate for weeks until two retiring Republicans broke ranks and voted to end blocking maneuvers.

Republicans are expected to make big gains in the November 2 elections and hope to win majorities in one or both houses of Congress.

Obama criticized the opposition party for fighting the bill and thanked the two Republicans, George Voinovich and George LeMieux, whose support allowed it to get through the Senate.

He said the measures would have fast-acting effects on the small business community, which both political parties are courting in an effort to boost jobs.

"It's going to speed relief to small businesses across the country right away," Obama said. "We've got to keep moving forward. That's why I fought so hard to pass this bill, and that's why I'm going to continue to do everything in my power to help small businesses open up and hire and expand."

(additional reporting by Alister Bull and Matt Spetalnick, editing by Philip Barbara)

WASHINGTON (Reuters) � Congressional passage of a bill to pressure Beijing to revalue its currency could further harm U.S.-Chinese trade relations already hampered by mutual mistrust and suspicion, U.S. companies invested in China said on Monday.

With U.S. congressional elections looming on November 2, many U.S. lawmakers who blame unfair Chinese trade practices for American job losses are eager to show they are taking steps to get tough with Beijing and help tackle high U.S. unemployment.

The U.S. Congress is considering legislation that would treat what lawmakers call China's undervalued yuan currency as an export subsidy, a step that would give the U.S. Commerce Department increased ability to slap duties on Chinese goods.

The U.S. House of Representatives is expected to pass the bill this week, but its future in the Senate is uncertain.

"If we take this additional step, it's going to continue this downward spiral," Tim Stratford, a former U.S. trade official who was part of a delegation visiting Washington from the American Chamber of Commerce in Shanghai, told reporters.

The American Chamber of Commerce in Shanghai bills itself as the "voice of American business" in China. Its board of governors includes top company officials from the Chinese operations of Citibank, FedEx, Goodyear Tire & Rubber, APCO Worldwide, Corning and General Motors.

The U.S. Commerce Department on Monday set final duties ranging up to 61 percent on hundreds of millions of dollars of copper pipe from China in one of several disputes causing friction between the two countries.

The move came a day after China upheld heavy duties on imports of chicken parts from the United States, as Beijing stood firm on a long-running dispute over mutual market access.

Chinese Vice Commerce Minister Chen Jian, speaking to reporters during a visit to Taiwan, said China would set policy on its currency according to its own needs.

"We'll make a decision based on our own economic development levels and the world economic situation. If it takes the yuan to appreciate for our economy to develop, we will do it even though it would have negative impact," Chen said. "But it is redundant for the U.S. Congress to pass the proposal.

The U.S. House Ways and Means Committee approved the yuan bill last Friday. The full House is expected as early as Wednesday to pass the bill with broad bipartisan support. But it may never become law because it is not currently scheduled for action in the Senate.

ONGOING QUARRELS

In past months, Washington and Beijing have also quarreled over Chinese government procurement policies, Internet censorship, U.S. arms sales to Taiwan and American sympathy for the Dalai Lama, the exiled Tibetan spiritual leader.

Bilateral ties have been complicated by tensions between China and neighbors South Korea and Japan -- U.S. security allies. U.S. support for Southeast Asian nations with competing territorial claims with China in the South China Sea is also a point of contention between the United States and China.

If Congress passes the currency bill and President Barack Obama signs it into law, the Chinese government could retaliate in a number of ways, ranging from steps to discourage U.S. imports to making it harder for U.S. companies to do business in China, Stratford said.

Stratford, who until last year served as assistant U.S. trade representative for China, said China's government and people have a lower opinion of the United States amid constant American complaints about Chinese trade practices and other concerns.

Chinese companies and consumers, sensitive to the political tensions between the two countries, also could shun the United States and turn even more to suppliers such as Japan, Germany and Brazil for imported goods, he said.

"The chance of these two types of things happening is quite great because the Chinese will find it offensive that Congress feels it needs this type of legislation," Stratford said.

U.S. poultry producers have been reminded of how they got caught in the cross-fire after President Barack Obama slapped duties last year on Chinese tires.

On Sunday, the Chinese Ministry of Commerce set final anti-dumping duties ranging from 50.3 percent to 105.4 percent on chicken parts from the United States, hitting companies such as Tyson Foods, Pilgrim's Pride and Sanderson Farms.

Those were in addition to final countervailing duties that China imposed last week to offset alleged U.S. government subsidies to poultry.

The USA Poultry & Egg Export Council flatly rejected that it "dumps" product in China at unfairly low prices or benefits from government subsidies. It said it was a victim of Chinese retaliation for Obama's tire decision last year.

"It's truly unfortunate that our industry has ended up in this situation, especially because the issues that created this disaster were not of our making and are beyond our control," the group's president Jim Sumner said.

(Additional reporting by Faith Hung and Lin Miaojung in Taipei; Editing by Will Dunham)

NEW YORK (Reuters) � A federal judge on Monday refused to dismiss a class-action lawsuit accusing American International Group Inc (AIG.N) of misleading investors about its exposure to subprime mortgages, which led to a liquidity crisis and $182.3 billion of federal bailouts.

U.S. District Judge Laura Taylor Swain said the plaintiffs alleged facts "giving rise to a strong inference of fraudulent intent" in how AIG communicated publicly about the risks in its portfolio of credit default swaps.

The lawsuit covers investors who owned AIG securities between March 16, 2006, and September 16, 2008, when AIG received its first bailout.

AIG did not immediately return a call seeking a comment.

Shares of AIG rose $1.72, or 4.7 percent, to $38.19 in morning trading on the New York Stock Exchange.

The case is In re: American International Group Inc 2008 Securities Litigation, U.S. District Court, Southern District of New York, No. 08-05072.

(Reporting by Jonathan Stempel in New York, editing by Maureen Bavdek)

WASHINGTON (Reuters) � Banking regulators on Monday said they are delaying a proposal that would begin putting into place how the government would use its new authority to dismantle large, collapsing financial companies in order to buy more time to gather feedback.

The board of the Federal Deposit Insurance Corp will instead be briefed by staff on issues related to the new authority and it will likely vote in early 2011 on a proposal to seek comment on specific issues.

The FDIC was considering voting on Monday on issuing an interim final rule that would have put in place some aspects of how the agency would handle the winddown of large financial firms but decided to wait so it could get more feedback from industry officials and other regulators, an FDIC official said.

Regulators who sit on the new Financial Stability Oversight Council asked the FDIC to give them more time to weigh in on the issue, the official said. The council will meet for the first time on October 1.

"Some members of the FSOC had really not had time to look it over," the official said.

On a separate issue, the agency will also vote on Monday on a final rule that would give federal protection to securitizations backed by home loans and other consumer debt if they meet higher standards and banks retain some of the risk associated with the products.

(Reporting by Dave Clarke; Editing by Andrea Ricci)

JOHANNESBURG/LONDON (Reuters) � Wal-Mart (WMT.N) is in talks to buy South Africa's Massmart (MSMJ.J), a $4 billion deal that would give the U.S. retailer a big presence in fast-growing Africa and bolster its emerging markets strategy.

The world's largest retailer has been hit by weakness in the United States, where low-income shoppers are particularly vulnerable to unemployment and higher petrol prices. It has responded by focusing on cost cuts and international growth.

Buying Massmart, South Africa's third-largest listed retailer by value, would give Wal-Mart a considerable network in Africa's biggest economy and a foothold in 13 other countries in sub-Saharan Africa.

Home to some of the world's fastest growing markets, Africa also boasts an emerging middle class and roughly 1 billion consumers, making it an increasingly attractive target for overseas investors.

"Massmart is a very good fit with their business," said Bryan Roberts, global research director at industry research firm Planet Retail in London.

Other international retailers could eventually bid for one of Massmart's local competitors to tap the potential of sub-Saharan Africa, he said.

"There's no shortage of good businesses that could be acquisition targets -- Shoprite (SHPJ.J), Woolworths (WHLJ.J) and the like."

Massmart and Wal-Mart said the U.S. company had made a non-binding proposal of 148 rand per Massmart share, valuing it at around 30 billion rand ($4.1 billion) or a premium of nearly 10 percent over Thursday's close of 134.75 rand.

Massmart said it has granted the U.S. firm an exclusivity period and said there was no certainty of a formal offer.

Shares of Massmart jumped more than 11 percent and were up 10.9 percent at 149.48 rand as of 5:58 a.m. ET, slightly exceeding the proposed offer price.

Shoprite shares were little changed while Woolworths stock rose around 1.4 percent.

Wal-Mart's bid values Massmart at 26.3 times its 12-month adjusted earnings per share, according to Thomson Reuters data. That compares to 21.5 times for Shoprite and 15.5 times for Woolworths.

The deal could boost South Africa's rand, which would benefit from an inflow of currency. The rand was near a 2-1/2 year high on Monday at 7.0100 to the dollar.

VOTE OF CONFIDENCE

Massmart sells general merchandise, electronics and food via a low-margin, high-volume model. It runs nearly 288 stores and nine different retail and wholesale chains.

It has also been one of the most aggressive of South Africa's retailers in expanding into the continent.

Wal-Mart's proposal is the third bid by a big overseas firm for a South African company in recent months.

"It's a big vote of confidence for the South African retail economy and for South Africa," said Syd Vianello, an analyst at Nedcor Securities.

HSBC (HSBA.L) is in talks to buy up to 70 percent of Nedbank (NEDJ.J), South Africa's fourth-largest lender, while Japan's Nippon Telegraph and Telephone Corp (9432.T) agreed in July to buy IT firm Dimension Data (DDTJ.J) (DDT.L) for $3.2 billion.

By joining forces with Wal-Mart, Massmart could put more pressure on its rivals, said Nedcor's Vianello.

"It also has lots and lots of pricing and competition implications for the South African retail industry. Wal-Mart is the world's largest retailer, it can source products cheaper than anyone else in the world."

Both Massmart and Shoprite had long been seen as potential targets for Wal-Mart, which has over 8,600 retail units around the world but no material presence in Africa.

Massmart shares have risen more than 50 percent this year, compared to a rise of more than 36 percent in the South African retailers index (.JGERE) and a little over 2 percent in the broader market (.JTOPI).

Deutsche Bank (DBKGn.DE) and Goldman Sachs (GS.N) advised Massmart.

(Writing by David Dolan; Editing by Michael Shields)

NEW YORK (Reuters) � U.S. stock index futures pointed to a firmer open on Wall Street on Monday, with futures for the S&P 500 up 0.04 percent, Dow Jones futures up 0.13 percent and Nasdaq 100 futures up 0.25 percent.

* On the M&A front, consumer goods giant Unilever Plc/N said it had agreed to buy United States-based hair care group Alberto Culver Co for $3.7 billion in cash. Shares of Alberto Culver traded in Frankfurt were up 15 percent.

* Wal-Mart Stores offered more than $4 billion for South African wholesaler Massmart as the world's largest retailer seeks to expand in fast-growing Africa.

* French drugmaker Sanofi-Aventis is seeking to line up more funding to potentially raise its $18.5 billion bid for Genzyme Corp, The Wall Street Journal reported on Sunday. Genzyme shares traded in Frankfurt were up 1.4 percent.

* M&T Bank Corp's negotiations to buy Sovereign Bank, a unit of Banco Santander, have stalled over disagreements as to who would control the combined entity, according to a report in The Wall Street Journal.

* Pre-orders for Apple Inc's iPhone 4 in China have exceeded 200,000 units since the handsets went on sale on Saturday, China Unicom said, adding that it has stopped taking online orders because of strong demand.

* French conglomerate Vivendi said it had sold an initial chunk of its 20 percent stake in U.S. media group NBC Universal to General Electric for $2 billion as it shifts its acquisition strategy. Vivendi said it would sell the remaining 12.34 percent it owns in NBC to GE for $3.8 billion after the completion of a GE transaction with new NBC owner Comcast, as per an agreement set out in late 2009.

* On the earnings front, Jabil Circuit and Paychex feature among the companies due to report earnings. On the macroeconomic side, investors await the Chicago Fed National Activity Index for August and the Chicago Fed Midwest Manufacturing Index for August.

* European stocks were up 0.3 percent in morning trade, extending Friday's sharp gains, with food and beverages shares featuring among the top gainers on news that Unilever is to acquire Alberto Culver.

* Oil rose toward $77 a barrel, near a two-week high, supported by cautious optimism over the strength of U.S. economic recovery and the outlook for energy demand.

* U.S. stocks notched their fourth week of gains on Friday as investors used a rise in business spending to revive the September rally after three days of losses.

* The Dow Jones industrial average was up 197.84 points, or 1.86 percent, at 10,860.26. The Standard & Poor's 500 Index

finished up 23.82 points, or 2.12 percent, at 1,148.65. The Nasdaq Composite Index was up 54.14 points, or 2.33 percent, at 2,381.22.

(Reporting by Blaise Robinson; Editing by Michael Shields)