Asian shares dipped on Friday, with investors in cautious mood ahead of the release of key payroll data out of the US later in the day.
Despite signals from the US Fed earlier this week hinting at a slowdown of its aggressive rate hikes policy, traders remain on edge with confidence brittle in the face of global challenges.
Japan’s Nikkei share average tumbled as much as 2% to a three-week low in earlier trading as a sharply higher yen hurt autos and other exporter stocks.
The benchmark Nikkei 225 index closed down at 1.59%, or 448.18 points to end at 27,777.90. The broader Topix index fell 1.64%, or 32.48 points, to 1,953.98.
The dollar fell as low as 135.01 yen on Friday, the lowest since August 18, extending the previous day’s plunge of more than 2%.
Investors are also watching for more signs that China is easing its zero-Covid policy, and whether China would be in a position to contribute more to global growth next year amid a looming global recession.
But Chinese blue chips slid 0.5%, as the country grappled with another surge in Covid-19 cases. Hong Kong’s Hang Seng index reversed earlier gains to be in the red at the close.
The Hang Seng Index dropped 0.33%, or 61.09 points, to 18,675.35.
The Shanghai Composite Index dipped 0.29%, or 9.33 points, to 3,156.14, while the Shenzhen Composite Index on China’s second exchange rose 0.02%, or 0.50 points, to 2,044.60.
Treasuries Retain Gains
Elsewhere across the region, MSCI’s index of regional stocks outside Japan slipped 0.28% while Indian stocks dropped with Mumbai’s signature Nifty 50 index down 0.62%, or 116.40 points, to close at 18,696.10.
Globally, Treasuries held on to their gains ahead of the US non-farm payrolls data, while the dollar nursed heavy losses.
The cautious tone in share markets, after the recent big rally, was set to extend to Europe, with the pan-region Euro Stoxx 50 futures easing 0.2%, German DAX futures down 0.1% and FTSE futures 0.2% lower.
US shares ended mixed on Thursday after a big rally the day before, buoyed by comments from Fed Chair Jerome Powell that did not sound as hawkish as some had feared.
Data overnight including falling US job openings and contracting US manufacturing activity, pointing to signs of easing cost pressure, added to evidence that the Fed’s rate hikes have cooled the economy.
The US dollar wallowed at a three-month low against major currencies. It was set for a 1.3% weekly drop.
In the oil market, prices seesawed ahead of a key meeting of producing countries over the weekend.
US crude oil futures reversed earlier losses to be flat around $81.21 per barrel, after surging to a two-week high of $83.34 in the previous session on a softer dollar.
Tokyo – Nikkei 225 < DOWN 1.59% at 27,777.90 (close)
Hong Kong – Hang Seng Index < DOWN 0.33% at 18,675.35 (close)
Shanghai – Composite < DOWN 0.29% at 3,156.14 (close)
London – FTSE 100 < DOWN 0.30% at 7,535.51 (0940 GMT)
New York – Dow < DOWN 0.56% at 34,395.01 (Thursday close)
- Reuters with additional editing by Sean O’Meara