Asian shares slipped on Friday with investors on edge ahead of the release of key US jobs data that could decide which way the Fed will jump next on interest rates.
There is a lot riding on the US non-farm payrolls report after the Federal Reserve Chair Jerome Powell said policymakers would not welcome any further weakening in the labour market, laying the ground for imminent rate cuts.
Japan’s Nikkei share average fell for a fourth straight session ahead of the release of the figures, while a stronger yen also weighed on sentiment.
Also on AF: Big Bucks and Salted Ducks: How US Official Became ‘China Spy’
The Nikkei closed 0.72% lower at 36,391.47 points, after falling as much as 1.7%. For the week, the index lost 5.15%, its worst week since July 26. Chip-making equipment maker Tokyo Electron fell 1.9% to drag the Nikkei the most.
The broader Topix slipped 0.89%, or 23.34 points, to 2,597.42, dragged lower by electronic appliance maker Hitachi, which lost 3.57%. The index lost 3.4% for the week.
China stocks finished at seven-month lows, as sharp falls in technology and property shares outweighed gains in brokerages fuelled by consolidation bets.
China’s former central bank governor Yi Gang said the country should focus on fighting deflationary pressure as the economy struggles to lift off again despite a raft of policy support measures.
Meanwhile, the central bank hinted at more easing on Thursday, but investors interpreted the signal as official recognition of economic weakness.
The Shanghai Composite Index dipped 0.81%, or 22.51 points, to 2,765.81, while the Shenzhen Composite Index on China’s second exchange dropped 1.60%, or 24.44 points, to 1,505.18.
The blue-chip CSI300 index ended 0.81% lower at 3,231.35 points, while the Hong Kong market was suspended from trading due to super typhoon Yagi.
On the day, the consumer staples sector ended down 0.97%, the real estate index lost 1.45% and the healthcare sub-index dropped 1.76%.
Elsewhere across the region, in earlier trade, Seoul, Mumbai and Wellington fell, while Sydney, Singapore, Taipei, Manila, Jakarta and Bangkok rose.
Oil Demand Fears
MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.2% higher but was heading towards a 2.8% drop for the week.
Europe was set for a lower open, with both Eurostoxx 50 futures and FTSE futures off 0.2%. Nasdaq futures skidded 0.5% while S&P futures slipped 0.2%.
Analysts are looking for new US jobs to rise by 160,000 and for the unemployment rate to dip to 4.2%. But a recent run of softer partials suggests risks are to the downside, fuelling speculation of an outsized half-point rate cut on September 18.
In forex, the Japanese yen rose 0.6% to 142.57 per dollar, bringing the weekly gain so far to 2.5%, although a strong payrolls report could see it wipe out those gains.
Treasury yields slipped, extending their declines this week. Two-year Treasury yields fell 18 basis points so far this week to 3.7268%, around the lowest since early 2023.
Ten-year yields were down 20 bps to 3.7080%, with the spread over two years on the verge of turning positive.
Oil is facing the worst week since October 2023 as demand worries weighed against a big withdrawal from US inventories and a delay to output increases by OPEC+ producers.
The supply issues failed to elicit a jump in crude prices. Brent crude futures steadied on Friday at $72.68 a barrel, but were down 8.3% so far in the week.
They were pinned near a key range of $70 to $71, a break of which would open the way to levels not seen since late 2021.
Gold edged 0.1% higher at $2,519 an ounce, just a touch below its record high.
Key figures
Tokyo – Nikkei 225 < DOWN 0.72% at 36,391.47 (close)
Hong Kong – Hang Seng Index <> CLOSED
Shanghai – Composite < DOWN 0.81% at 2,765.81 (close)
London – FTSE 100 < DOWN 0.41% at 8,207.69 (0936 BST)
New York – Dow < DOWN 0.54% at 40,755.75 (Thursday close)
- Reuters with additional editing by Sean O’Meara
Read more:
China Starts Merging State Brokerages, to Create $226bn Giant
Consumer Confidence in China Drops to Near Historic Lows
Chinese Fund Manager Asks Execs to Return ‘Excess’ Pay
Hang Sengs Dips Despite Property Boost, Yen Weighs on Nikkei
