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LONDON Reuters Britains financial watchdog slapped a 17.5 million pounds $27 million fine on Goldman Sachs on Thursday for inadequate disclosure of a U.S. probe into the Wall Street powerhouse.

The fine -- one of the biggest ever imposed in Britain -- was related to Goldmans troubled Abacus mortgage-security product, which resulted in the investment bank being investigated by the U.S. Securities & Exchange Commission SEC.

In July, Goldman agreed to pay $550 million to settle civil fraud charges over how it marketed the Abacus subprime mortgage product, ending months of negotiations that rattled the banks clients and investors.

The Abacus product was marketed by French banker Fabrice Tourre. Tourre, who had dubbed himself as "Fabulous Fab," denied allegations that he or the bank had misled investors over the high-risk Abacus product.

Britains Financial Services Authority said on Thursday that Goldman had not adequately informed it of the American investigation into the Abacus affair.

"Goldman Sachs International did not set out to hide anything, but its defective systems and controls meant that the level and quality of its communications with the FSA fell far below what we expect of an authorized firm," FSA director Margaret Cole said in a statement.

In a seven-word response to the FSA fine, a Goldman Sachs spokeswoman said: "Were pleased the matter is resolved."

Reporting by Sudip Kar-Gupta; Editing by Mike Nesbit

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HONG KONG Reuters Asian stocks edged up and the yen held below a 15-year high on Thursday, after a small rally on Wall Street driven by successful European bond auctions gave investors an excuse to lighten up on their bets.

The two biggest issues on investors minds -- European financial stability and the slowing U.S. recovery -- held bargain hunting in check and risk taking to a minimum.

Australia was the exception, where rising equities led Asia on a solid labor market report, which also drove the Australian dollar to a four-month high.

With few major economic reports due, traders will probably focus on significant chart indicators for the rest of the day.

The 55-day moving average of the U.S. dollar index .DXY has been capping moves higher for the last three weeks, while the 100-day moving average is the closest obstacle in front of U.S. S&P 500 index gains .SPX.

Meanwhile, the yens 11 percent rise this year has depressed Japanese equity valuations, with stocks trading at the cheapest relative to expected earnings since December 2008.

With uncertainty rife about how much longer the yens climb has to run, investors were cautious about rebuilding their Japanese stock portfolios just yet.

"Worries about Europe were soothed somewhat following a bond auction in Portugal, and that prompted short-covering in the market, which was hit hard by the advance in the yen versus the dollar and the euro yesterday," said Tsuyoshi Segawa, an equity strategist at Mizuho Securities.

"But market players were reminded that Europes sovereign concerns are continuing and thats not something that will improve right away," Segawa said.

CHEAP JAPAN

The Nikkei share average .N225 closed 0.8 percent higher but was still down 3 percent for the quarter and is the third-worst performing Asian stock market this year.

Japanese stocks were trading at 12.9 times expected earnings one year hence, the lowest since December 2008, when markets were in the midst of the financial crisis, Thomson Reuters I/B/E/S data showed.

"Relatively low prices may trigger occasional bottom fishing, but we do not see the market emerging from its downward spiral until momentum indicators stop deteriorating," TrimTabs Investment Research said in a report.

The MSCI index of Asia Pacific stocks outside Japan was up 0.6 percent, led by early gains in the materials sector. The index has risen 10 percent in the quarter so far, slightly outperforming the all-country world indexs 8.6 percent rise.

Investors were skittish just about everywhere though and did not hesitate to dump positions on the slightest sign of trouble.

The Shanghai composite index .SSEC led declining Asian markets, falling 1.1 percent after a sudden drop in commodities futures prompted some profit taking ahead of a slew of economic data to be released over the next few days.

The yen was steady with global equity markets edging higher. The dollar was at 83.64 yen, down 0.3 percent on the day but above a 15-year low hit on Wednesday around 83.34 yen.

The Australian dollar was a big mover on the day, rising to $0.9224, the highest since May, before drifting to $0.9213, up 0.3 percent. Australian employment in August was surprisingly strong, lifting the stock market .AXJO and knocking bond futures lower.

"Its good news in a sense it means household income and spending will probably grow," Michael Blythe, chief economist at CBA in Sydney, said of the surge in Australian employment. "But it comes at the risk of rising inflation pressure as well."

U.S. oil and Brent futures traded nearly flat on the day, at $74.78 a barrel and $78.22 a barrel, cutting gains on chatter that Chinese regulators were investigating speculative funds in the rubber market. The rumor caused widespread weakness in China-traded commodities, from copper to zinc, analysts said.

Additional reporting by Aiko Hayashi in TOKYO; Editing by Alex Richardson

WASHINGTON Reuters Projected U.S. economic growth for the rest of this year and next was revised down for a third month in a row by a panel of about 50 economists.

The latest Blue Chip Economic Indicators report on Thursday said the weaker outlook for second-half 2010 growth stemmed from lower expectations for consumer spending, business investment and private construction.

"Growth in the current quarter now is expected to be little better than the disappointingly soft advance registered last quarter," the survey said. Gross domestic product grew at a meager 1.6 percent annual rate in the second quarter, less than half the first quarters 3.7 percent rate.

But the economists group said that, after the mid-year soft patch, it saw a gradual improving trend setting in with growth slightly surpassing trend rate in the second half of 2011.

Blue Chip defines GDP trend growth at about 2-3/4 percent a year.

"For all of 2010, real GDP now is forecast to increase 2.7 percent on a year-to-year basis, 0.2 of a percentage point less than a month ago and 0.6 of a point less than predicted in June," the survey said.

Its consensus forecast for real GDP growth in 2011 was cut by 0.3 of a percentage point from a month ago to 2.5 percent.

"Given the depth of the recession, a forecast of roughly trend growth this year and next amounts to a very disappointing pace of recovery, with little progress expected to be made in lowering the unemployment rate," the forecast said.

Its consensus forecast is that the U.S. unemployment rate will end this year at 9.6 percent and fall only to 9 percent by the end of 2011.

It forecast that after averaging 554,000 new housing units in 2009, starts this year will rise to 600,000 and to 760,000 units in 2011. "Although residential investment appears destined to subtract from GDP in the second half of this year, double digit growth is expected by early 2011, with rates of growth over 30 percent by the second half," Blue Chip said.

The economists said they expect short-term interest rates to remain very low before starting to rise next summer. They said the Federal Reserve -- the U.S. central bank -- likely will keep the federal funds rate at its current range of zero to 0.25 percent through mid-2011, finally raising it to 0.75 percent by the end of 2011.

Reporting by Glenn Somerville; Editing by James Dalgleish