HONG KONG: Asian markets sank Thursday following a sell-off on Wall Street, with dealers spooked by disappointing US jobs data.
The dollar rebounded slightly after shedding around one percent against the yen in New York, while expectations the Federal Reserve will start to pull back on its monetary easing also pushed the US unit up further against its Australian counterpart.
Tokyo fell 0.45 percent by the break after losing almost four percent on Wednesday due to disappointment at prime minister Shinzo Abe’s latest plan to boost Japan’s economy.
Hong Kong was 0.83 percent lower, Sydney shed 0.70 percent and Shanghai eased 0.43 percent.
Seoul and Jakarta were closed for public holidays.
Regional investors took their bets off the table after payroll firm ADP reported that the US private sector added 135,000 jobs in May, less than the forecast 157,000.
That came as the Fed’s closely watched Beige Book, a snapshot of US economic conditions based on a nationwide survey, said the economy continues to grow at a “modest to moderate” speed, suggesting steady but still slow expansion.
Wednesday’s news added to previous data showing a widening of the US trade deficit and a surprise shrinkage of manufacturing activity.
US dealers reacted to the news by running for the sidelines, sending the dollar tumbling to as low as 99 yen while equities also suffered.
On Wall Street the Dow tumbled 1.43 percent to below 15,000 for the first time in a month, while the S&P 500 shed 1.38 percent and the Nasdaq was 1.27 percent lower.
The jobs figures will focus minds more on Friday’s non-farm payrolls data, which will provide a better clue to the next move from the Fed, with many economists tipping an end to its huge bond-buying, or quantitative easing, scheme.
Adding to the downbeat sentiment, the Eurostat statistics agency said the eurozone economy shrank 0.2 percent quarter on quarter in January-March, while it also contracted 1.1 percent compared with a year earlier.
Separate data showed that eurozone business activity continued to deteriorate in May but at a slower pace.
In early Asian trade the dollar ticked up slightly, buying 99.12 yen, compared with 99.06 yen in New York late Wednesday, while the euro sat at $1.3079 and 129.92 yen, against $1.3091 and 129.65 yen.
The Australian dollar, which last month fell below parity with the greenback for the first time in a year, continued its downtrend, sitting at US$0.9494, compared with US$0.9506.
“It may take a minimum of several weeks for the markets to settle down to an acceptable level – and that assumes favourable external factors, such as a stable dollar-yen and a reliable US economic recovery,” said Naoki Fujiwara, fund manager at Shinkin Asset Management.
On oil markets New York’s main contract, light sweet crude for delivery in July, added four cents to $93.78 a barrel and Brent North Sea crude for July was down 14 cents at $102.90.
Gold was at $1,401.79 by 0235 GMT from $1,397.61 late Wednesday.