HONG KONG: Asian markets mostly fell Friday as lingering worries over global growth sent traders running from higher-risk assets, while attention turns to the release of US jobs data later in the day.
Confidence on trading floors has been sparse the past two weeks following disappointing data and announcements from China to the United States that tore a hole in hopes the world economy was showing signs of recovery.
The US Labor Department will later Friday release jobs figures for April, with expectations of a slowdown in new posts.
But while the report is forecast to show the world’s number one economy is not as strong as hoped, the dollar has managed to hold its gains after two Federal Reserve bosses argued the case for an interest rate hike as early as June.
The comments from the two presidents helped lift the dollar from the 105.50 yen trough touched on Tuesday to levels above 107 yen Friday. In afternoon Asian trade the greenback was at 107 yen.
The rally shielded Japanese stocks from a sharp sell-off Friday, with the Nikkei closing down 0.3 percent.
Shanghai tumbled 2.8 percent and Hong Kong was off 1.7 percent in the afternoon. Singapore was 1.2 percent down, while Taipei and Manila each shed 0.3 percent.
However, Sydney reversed morning losses to end 0.2 percent higher.
In early European trade London and Frankfurt lost 0.5 percent while Paris was down 0.8 percent.
Takata plunges again
“It’s not as bad as it could have been with Japan coming back and that’s been helped by a bit of weakening in the yen during the past couple of days,” Angus Nicholson, a market analyst at IG Ltd. in Melbourne, told Bloomberg News.
“If we see a strong non-farm payrolls number tonight it will help the dollar move in the right direction.”
Japanese Prime Minister Shinzo Abe looked to staunch a yen rally Thursday by hinting at possible interventions.
He said “drastic fluctuations” in the unit risked having a major impact on his nation’s exporters, adding: “We need to carefully watch these movements of exchange rate and as necessary we would like to respond.”
The flight to safety also hit Asian emerging market currencies, with the South Korean won down 0.5 percent against the dollar, Indonesia’s rupiah 0.1 percent lower and the Indian rupee also down 0.1 percent.
The Australian dollar dived 1.5 percent as it continues to feel the effects of this week’s shock interest rate cut by the country’s central bank.
Oil prices retreated, with West Texas Intermediate off 0.8 percent and Brent down 0.5 percent, as the stronger greenback makes the dollar-priced commodity more expensive to holders of other currencies.
In Tokyo auto parts maker Takata plunged 8.6 percent after US regulators ordered it to expand recalls of faulty airbags by between 35 million and 40 million in the United States. About 50 million have already been recalled globally.
The firm has lost more than 80 percent of its value over the past two years as it faces lawsuits, investigations and huge costs related to the crisis.