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Asia: Stocks mixed, US dollar in best week since 2016

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[TOKYO] Asian stocks had a mixed open Friday as plans for US tariffs on Chinese imports revived concerns about global trade growth. The US dollar headed for its best week since 2016 after the Federal Reserve signalled further tightening in 2018 while the European Central Bank signalled it won't raise interest rates for more than a year.

Equities edged higher in Japan, rose in Australia and dipped in South Korea. The S&P 500 closed with a modest rise Thursday, while the Nasdaq Composite Index hit a record high.

Earlier, European stocks jumped and the euro suffered its biggest drop in about two years after the region's central bank delivered a somewhat dovish message to investors. Europe's bonds rallied. Emerging markets are under pressure as worries about an overhaul of Argentina's central bank leadership saw a plunge in its currency.

Concluding what's been an event-packed week for global markets, the Bank of Japan meets Friday, with no change to policy expected - though governor Haruhiko Kuroda is likely to be pressed in a news conference on recent cutbacks in bond purchases. The BOJ is set to stand out against global peers that are moving ahead with policy normalization.

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ECB President Mario Draghi succeeded Thursday in announcing the phasing out of quantitative easing without roiling markets. Prospects for no rate hike until the second half of 2019 saw the euro tumble at one point the most since 2016. A day earlier, Fed Chairman Jerome Powell said that with the US economy in "great" shape, American policy makers will continue with gradual rate increases. Fed officials indicated that they'll raise their benchmark a total of four times this year.

Still to come Friday is an expected official announcement on President Donald Trump's list of US$50 billion of Chinese imports targeted for higher tariffs, a move that China has said it will respond to in kind. China had also indicated that the imposition of tariffs would halt broader bilateral trade talks.

Elsewhere, oil rose for a fifth consecutive day as a halting of oil loading from two key ports in Libya offset concerns about a phase-out of supply limits by OPEC and allied producers.

STOCKS

Japan's Topix Index was up 0.1 per cent as of 9.59am in Tokyo.

Australia's S&P/ASX 200 futures rose one per cent.

Hang Seng futures rose 0.2 per cent.

Futures on the S&P 500 Index were down 0.2 per cent after the underlying gauge closed 0.3 per cent higher.

MSCI Asia Pacific Index dipped 0.1 per cent.

CURRENCIES

The Bloomberg Dollar Spot Index rose 0.1 per cent Friday, taking its gain for the week to 1.5 per cent, the best performance since November 2016.

The euro was little changed Friday at US$1.1563.

The British pound was at US$1.3251.

The Japanese yen was little changed at 110.55 per US dollar.

BONDS

The yield on 10-year Treasuries was 2.92 per cent.

Germany's 10-year yield dipped six basis points Thursday, to 0.43 per cent.

COMMODITIES

West Texas Intermediate crude was up 0.1 per cent at US$66.95 a barrel.

Gold climbed 0.1 per cent to US$1,300.46 an ounce.

LME copper sank 0.6 per cent to US$7,132 per metric ton.

BLOOMBERG