Thursday 14 / November / 2024
Tokyo: Asian shares fell on Friday after a rocky performance on Wall Street, while the yen nursed losses as traders wagered the Bank of Japan will add to its massive stimulus before too long.
Major US stock indexes closed mixed on Thursday, with the Nasdaq Composite down 0.49 per cent as Apple shares skidded to a two-year low on concerns about iPhone demand.
MSCI's broadest index of Asia-Pacific shares outside Japan fell one per cent, and was track for a weekly drop of the same magnitude, its third straight week of declines.
Hong Kong shares slipped 0.9 per cent, poised for a 1.9 per cent decline for the week.
Chinese shares started the day in positive territory but quickly retreated, with the CSI 300 down 0.2 per cent and the Shanghai Composite losing 0.1 per cent. They are on track to end the week lower, the former by 1.4 per cent and the latter by 2.7 per cent, after being hit earlier in the week by fears that Beijing may begin to taper its stimulus plans due to concerns about excessive debt.
Investors are looking to April Chinese bank lending data later in the day, and industrial output, investment and retail sales data on Saturday to give them more clues on whether the economy's prolonged slump is bottoming out.
Japan's Nikkei widened its slide to 1.1 per cent, after a brief spike at the open, but was still up 2.2 per cent for the week.
"Although investors remain cautious, they think Japanese stocks will eventually catch up with the strength in overseas stocks such as US shares," said Isao Kubo, equity strategist at Nissay Asset Management.
Shares of Nissan Motor Co rose 4.8 per cent, while Mitsubishi Motors Corp tumbled 4.7 per cent on Friday, after Nissan agreed to buy a 34 per cent stake in its smaller, scandal-hit rival on Thursday.
The yen has weakened in most recent sessions as investors pared long positions and Japanese officials explicitly warned about currency intervention.
Also undermining the yen, a prominent academic with close ties to BOJ Governor Haruhiko Kuroda said on Thursday that the Bank of Japan is likely to expand monetary stimulus either in June or July with an eye on first-quarter gross domestic product data and the outcome of this month's G7 summit.
The dollar slipped 0.2 per cent against the yen on Friday to 108.78 after scaling a two-week peak of 109.40 overnight, moving well away from an 18-month low of 105.55 yen plumbed on May 3.
"The USD/JPY moved back into the 109 handle overnight, likely seeing Japanese policy makers breathe a sigh of relief," Angus Nicholson, market analyst at IG in Melbourne, wrote in a note.
The euro was slightly lower at $1.1370.
Higher US Treasury yields helped underpin the greenback, after two Federal Reserve officials said on Thursday that the US central bank remains on track to hike interest rates this year, though they didn't offer clues on the timeline for its tightening policy.
Cleveland Fed President Loretta Mester, who has been less cautious about future rate increases than many of her colleagues, said that inflation measures have moved higher. She said any uncertainty in the Fed's economic forecasting should not stop the central bank from taking monetary policy decisions.
Boston Fed President Eric Rosengren, a voting member this year on the Fed's rate-setting committee, said the central bank should raise rates again if second-quarter data confirms that the U.S. labour market is near full strength and inflation is on track to accelerate.
The yield on benchmark 10-year notes retreated to 1.7395 per cent in Asian trade, after closing at 1.758 per cent overnight.
Later on Friday, investors await a fresh set of US economic readings, including retail sales data and the April producer price index.
Crude oil futures slipped, weighed down by the dollar and a warning by Russia that a global crude supply overhang could last into next year.
US crude fell 1.3 per cent to $46.11 a barrel, moving away from a six-month high of $47.02 hit on Thursday but still on track for a weekly gain of 3.3 per cent.
Brent crude fell 0.9 per cent to $47.64, and was poised to gain 5 per cent this week.
The dollar's strength also sank gold, which is set for its worst weekly decline in seven weeks.
Spot gold recovered 0.3 per cent to $1,266.86 an ounce on Friday, following a drop of 1.1 per cent in the previous session, on track for a weekly loss of 1.7 per cent.
