HONG KONG: Tokyo shares fell in thin Asian trade on Friday despite a pick-up in inflation last year and better-than-expected US growth data that helped soothe fears about emerging economies after a global sell-off this week.
A Wall Street rally provided a positive lead, but with most regional markets closed for the Chinese New Year holiday business was subdued.
Tokyo fell 0.62 percent, giving up earlier gains. The Nikkei dropped 92.53 points to 14,914.53, extending heavy losses suffered on Thursday.
Sydney ended flat, edging up 1.9 points to 5,190, and Wellington added 0.51 percent, or 24.74 points to 4874.58.
Hong Kong, Shanghai, Seoul, Taipei, Jakarta, Kuala Lumpur, Manila and Singapore were closed.
Japan’s fight against deflation had a boost after official data showed consumer prices rose 0.4 percent last year, the first annual rise since 2008. The Bank of Japan has an ambitious target of 2-percent inflation by mid-2015.
In another positive sign, separate data showed that spending by Japan’s households was up last month as the nation’s factories expanded their output, while the unemployment rate hit a six-year low.
However, the inflation figures were tempered by the fact that most of the rise came from a surge in energy costs, as Japan relies on expensive fossil fuel imports since closing its nuclear plants after the Fukushima atomic disaster.
Traders were given a strong lead from New York City after the US Commerce Department released data showing the world’s number one economy expanded 3.2 percent in October to December.
The figure was well above the 3-percent projected by analysts, while investors were also cheered by a 3.3-percent rise in consumer spending, which is a crucial driver of growth in the United States.
The upbeat numbers provided much-needed relief after the turmoil unleashed by the US Federal Reserve’s decision to further cut its stimulus program.
The central bank’s announcement raised fears of a flight of capital from developing nations such as Indonesia, India, South Africa and Russia, sending their currencies plunging against the dollar.
However, Thursday US growth figures gave them a fillip, with Russia’s ruble, the South African rand, Turkey’s lira, Brazil’s real and the Indian rupee all either flat or stronger, even as the dollar itself surged against major currencies.
On Wall Street, the Dow rose 0.70 percent and the broader S&P 500 added 1.13 percent. The Nasdaq jumped 1.77 percent, helped by strong gains in Facebook, Twitter, Google and other online ad-dependent tech stocks.
“There are risks of further fallout in emerging markets as the US Fed’s tapering policy proceeds but this can be seen as natural after several years of easy money,” Tachibana Securities market analyst Kenichi Hirano told Dow Jones Newswires.
The dollar was at 102.45 yen early on Friday compared with 102.71 yen late on Thursday in New York City, and just a touch up from the 102.40 yen earlier on Thursday in Asia.
The euro fetched $1.3541 and 138.98 yen against $1.3554 and 139.21 yen.