HONG KONG: Asian stock markets were mostly lower while the dollar sank further against the yen on Thursday as traders nervously await the release of crucial US jobs report later in the day.
At the end of a torrid week for the greenback that has seen it lose about four percent against the yen, economists said the non-farm payrolls data will determine its near-term direction.
The continued weakness of the US unit sent Tokyo stocks down again, with the Nikkei losing 1.33 percent by the break, while Hong Kong was 0.53 percent lower, Sydney gave up 0.73 percent, Seoul slipped 1.33 percent and Shanghai dipped 0.10 percent.
There are fears that a weak batch of job creation figures for May will highlight weakness in the US economy, fuelling another round of dollar selling.
The greenback has been under pressure all week following a series of poor data including on manufacturing and trade, while the Federal Reserve has also indicated that growth remains subdued.
Friday’s data will also be used to gauge the Federal Reserve’s next policy move amid expectations it is about to start pulling the plug on its monetary easing policy, also known as quantitative easing.
“Nonfarm payrolls data… will determine near-term direction of stocks,” Tim Radford, global analyst at Rivkin, wrote in a note.
“Although a better than expected reading may indicate the Federal Reserve may look to reduce stimulus as early as September, the market should respond favourably,” he said, according to Dow Jones Newswires.
The dollar stood at 96.40 yen in Tokyo, compared with 97.07 yen late Thursday in New York, where at one point it sunk as low as 95.88 yen. The greenback is down from more than 100 yen at the start of the week.
The euro bought $1.3250 and 127.70 yen, against $1.3243 and 128.55 yen.
The European single currency was given support after the region’s central bank held off another interest rate cut, while its head, Mario Draghi, offered some optimism for the troubled eurozone.
Despite the turmoil on forex markets Wall Street’s main indexes ended in positive territory. The Dow rose 0.53 percent, the S&P 500 added 0.85 percent and the Nasdaq was 0.66 percent higher.
On oil markets New York’s main contract, light sweet crude for delivery in July, dropped 12 cents to $94.64 a barrel and Brent North Sea crude for July shed a cent to $103.60.
Gold was at $1,413.79 by 0220 GMT from $1,405.75 late Thursday.