Asia: Markets down ahead of US jobs report

[HONG KONG] Asian markets tumbled on Friday as lingering worries over global growth sent traders running from higher-risk assets, while attention turns to the release of US jobs data later in the day.

Japan's Nikkei suffered big losses as it reopened from a three-day holiday to play catch-up with a global sell-off. However, analysts said the losses were tempered owing to a fall in the yen against the dollar from 18-month highs.

Confidence on trading floors has been sparse the past two weeks following disappointing data and announcements from China to the United States that tore a hole in hopes the global economy was showing signs of recovery.

The US Labor Department later Friday will release jobs figures for April, with expectations of a slowdown in new posts.

But while the report is forecast to show the world's number two economy is not as strong as hoped, the dollar has managed to hold its gains after two Federal Reserve bosses argued the case for an interest rate hike as early as June.

The comments from the two presidents helped lift the dollar from the 105.50 yen trough touched on Tuesday to levels above 107 yen Friday. In early Japanese trade the greenback was at 107.15 yen.

The rally shielded Japanese stocks from a sharp sell-off Friday, with the Nikkei down 0.7 per cent by the break.

Hong Kong fell one per cent, while Shanghai shed 0.1 per cent and Sydney gave up 0.1 per cent. Singapore lost 1.2 per cent and Taipei 0.5 per cent.

"It's not as bad as it could have been with Japan coming back and that's been helped by a bit of weakening in the yen during the past couple of days," Angus Nicholson, a market analyst at IG in Melbourne, told Bloomberg News.

"If we see a strong non-farm payrolls number tonight it will help the dollar move in the right direction." Japanese Prime Minister Shinzo Abe looked to staunch a yen rally Thursday by hinting at possible interventions.

He said "drastic fluctuations" in the unit risked having a major impact on his nation's exporters, adding: "We need to carefully watch these movements of exchange rate and as necessary we would like to respond."

The flight to safety also hit Asian emerging market currencies, with the South Korean won down 0.5 per cent against the dollar and Indonesia's rupiah 0.1 per cent lower.

The Australian dollar was down one per cent as it continues to feel the effects of this week's shock interest rate cut by the country's central bank.

AFP