* C$ falls to $1.0146
* Bonds maintain safety bid
* Canada factory sales leap, U.S. housing starts dive
TORONTO, March 16 (Reuters) - The Canadian dollar was slightly lower against the U.S. currency on Wednesday morning as Japan's nuclear crisis and clashes in Bahrain were weighed against a mixed bag of data.
The currency, an outperformer overnight after a volatile session on Tuesday, eked out a brief gain after Canadian manufacturing sales data showed a much greater-than-expected 4.5 percent jump in January from December.
The increase dwarfed analysts' predictions of a 1.0 percent rise. Sales in January hit C$47.7 billion, the highest level since October 2008. It was also a bright spot following a spate of soft Canadian data that has helped scale back expectations of any interest rate hikes before midyear. [ID:nN16104517] ECONCA BOCWATCH
But figures on Wednesday morning also showed U.S. housing starts dived 22.5 percent in February, the largest monthly fall in 27 years, while U.S. producer prices surged in February and pointed to inflationary pressures, which could affect the outlook for U.S. interest rate hikes.
"Everything is shifting now after we got very weak data from the U.S. in terms of housing starts, well below consensus, well below historical averages. It just highlights the ongoing themes for the U.S. dollar," said Camilla Sutton, chief currency strategist, at Scotia Capital.
At 9:33 a.m. (1333 GMT), the Canadian dollar CAD=D4 was at C$0.9856 to the U.S. dollar, or $1.0146, down from Tuesday's close of C$0.9840 to the U.S. dollar, or $1.0163.
Sutton said recent congestion in the C$0.9770 area would represent U.S. dollar support, while the 50-day moving average of C$0.9866 marks the initial place for U.S. dollar resistance.
Trouble in Bahrain and concerns about euro zone debt weighed on risk sentiment, but sent oil prices higher and gave minor support to the commodity-linked Canadian dollar.
Developments in Japan's nuclear crisis were being closely watched and considered an ongoing risk, but analysts were increasingly acknowledging that the impact on global growth would probably be relatively limited.
Government bond prices rose on doubts over the strength of the economic recovery, and as equity markets were under pressure.
The two-year Canadian government bond CA2YT=RR was up 8 Canadian cents to yield 1.588 percent, while the 10-year bond CA10YT=RR advanced 50 Canadian cents to yield 3.141 percent. (Reporting by Ka Yan Ng; editing by Peter Galloway)