Asia: Shares, dollar start week on the back foot

[TOKYO] Asian stocks wobbled on Monday and Japan's Nikkei index slid as the dollar notched a fresh 17-month low against the yen.

MSCI's broadest index of Asia-Pacific shares outside Japan erased earlier losses and edged up about 0.1 per cent, after Wall Street ended with modest gains on Friday even as the S&P 500 still suffered its biggest weekly decline in two months.

Japan's Nikkei stock index tumbled 1.3 per cent. In addition to a stronger currency, data released early on Monday showed Japan's core machinery orders fell 9.2 per cent in February from the previous month, in a sign that business investment remains subdued.

"While February's machinery orders fell less than anticipated, Japan markets remain weighed down by a strengthening yen and uncertainty surrounding when, or if, the Bank of Japan will intervene," said Andrew Meredith, co-managing director at Tyton Capital Advisors.

Data out on Monday showed China's consumer price inflation was less than expected in March, while wholesale prices declined less than anticipated, in a sign that deflationary pressure in the industrial sector may be easing.

While the figures pointed to stabilizing prices, they also underscored that the central bank's prolonged easing campaign begun in late 2014 has yet to result in substantial price increases.

Chinese shares were higher in early trading, with the blue-chip CSI300 index up 1.8 per cent, while the Shanghai Composite Index added 1.9 per cent.

The greenback's recent slide against the yen prompted a chorus of warnings from officials in Tokyo and put investors on alert for direct yen-selling intervention, though many believed Japan would stay its invention hand.

Japan's top government spokesman, Chief Cabinet Secretary Yoshihide Suga, said on Monday that recent currency moves were one-sided and speculative and that the government would take steps as needed.

The dollar wallowed close to lows notched last week, as investors mulled the outlook for US monetary policy, with the Federal Reserve seen as being more cautious on hiking interest rates than some investors had believed.

The dollar index, which tracks the US unit against a basket of six major currencies, fell 0.2 per cent to 94.094 , within sight of last week's low of 94.015, which was its lowest since October.

The euro was up about 0.1 per cent at US$1.1412, not far from last week's high of US$1.1454, its highest since October.

The dollar slipped 0.2 per cent to 107.91 yen after earlier nudging down to 107.63, which was its weakest since October 2014.

Crude oil prices pared earlier gains but were still higher after soaring more than 6 per cent on Friday. They also marked gains of about 8 per cent for the week, as drawdowns in US crude stockpiles fed hopes that the end was in sight for the global supply glut that has plagued the industry for nearly two years.

US crude futures added 0.4 per cent to US$39.87 a barrel after jumping 6.6 per cent on Friday, while Brent crude was also up about 0.4 per cent at US$42.12, after settling up 6.4 per cent.

The weaker dollar and stock market losses helped lift spot gold to its highest in nearly three weeks. Gold rose to US$1,251.70 an ounce, its highest since March 22. It was last up about 0.9 per cent at US$1,251.00.

REUTERS