SINGAPORE, Sept. 23 (MNI) - The U.S. dollar's losses continued Wednesday morning in Asia, although mild weakness in some regional stock markets cushioned the dollar's downside as risk-sensitive currencies eased off their initial highs.

In China, the Shanghai Composite Index ended the morning session flat at 2,897.57 after earlier slipping into negative territory. Japan's stock market remained closed after ending down 0.7% last Friday.

Dealers said early U.S. dollar weakness came after the New Zealand currency jumped to a fresh high for the year at $0.7313, following the release of better-than-expected second-quarter GDP data.

Real GDP posted a better-than-expected 0.1% quarter-over-quarter gain in the March to June quarter, after five consecutive quarters of decline, the government statistics office reported.

The Q2 result was better than the market consensus forecast for a contraction of 0.3% for the quarter.

"The New Zealand dollar again led the charge after a surprise increase in Q2 GDP officially ended the recession and brought rate hikes a bit closer," commented analysts at LGT Bank.

The U.S. currency fell to a Y90.48 low against the yen as the Kiwi rose, while euro-dollar also spiked to a $$1,4843 high, also marking its fresh high for the year after buy stops were triggered above previous high at $1.4821.

Euro-dollar then backed off as the market hit calmer waters after the initial spurt of activity, ending the morning around $1.4820 versus the opening low of $1.4791.

Tech charts show euro-dollar facing resistance at $1.4851/62, which marks the 100% projection of Q4 2008 rally, and the Sept. 22, 2008 high, respectively, and then $1.4904, the top of the daily Bollinger band.

Dollar-yen saw a relatively subdued morning with Tokyo markets still closed for holidays, although the pair recovered from its early Sydney low to around Y90.83. Dollar-yen then spent the rest of the morning in mid-range between Y90.70 and Y91.05.

As for the commodity currencies, Kiwi's jump to a new high today now had dealers talking about a potential break above $0.7400 likely to spur further rallies. Tech charts meanwhile showed next resistance above that at $0.7431, marking a 76.4% retracement of the broad downmove from $0.8212 in March 2008.

"Initial resistance was felt at $0.7240 but (that) soon gave way when the sell-U.S. dollar theme came into the picture," noted one trader.

Aussie-dollar followed kiwi's sharp early gains, striking a high of $0.8790 after it broke above last night's $0.8758 peak, and the Sept. 17 high of $0.8776, triggering a wave of stop-losses.

The pair then eased back to $0.8745 as early weakness in regional stocks capped gains in risk-sensitive instruments, and spent the rest of the morning session consolidating in mid-range, around $0.8767.

iahmad@marketnews.com ** Market News International Singapore Newsroom: 65-6559 6144 **