/ AFP / Kazuhiro Nogi
HONG KONG, China (AFP) — Asian markets mostly headed into the weekend on a negative note Friday following a sell-off on Wall Street, United States jobs data coming in below par and a dive in oil prices fueling losses across the energy sector.
Increasing expectations that central banks are about to start winding down their easy money policies are also weighing on buying sentiment and dragging on the dollar.
With traders already nervous over North Korea’s latest missile provocation, analysts said there is little desire to buy risky assets such as stocks.
US markets closed sharply lower after payrolls firm ADP said private-sector employers added far fewer jobs last month than had been forecast.
The reading fanned concerns about the government’s official figures later Friday as experts suggest another two hikes in US interest rates this year are no longer certain, stifling the greenback.
“Unless US economic data starts to improve again, the short-term outlook for the US dollar is rather negative,” said AxiTrader market analyst Milan Cutkovic.
“Rate expectations have declined. The market is expecting only one more rate hike this year. More importantly, the Fed is no longer the only hawkish central bank amongst the developed economies.”
While the US is showing some signs of softening, the global outlook is improving, which has emboldened central banks to begin scaling back the accommodative measures put in place during the financial crisis.
G20 in focus
The Bank of England, Bank of Canada and European Central Bank are among those looking at tightening policies, bringing an end to the divergence that has supported the dollar for years.
The dollar edged up against the pound and euro Friday but held recent losses.
But it rallied against the yen after the Bank of Japan went on a bond-buying spree to lower yields on its benchmark 10-year notes, which had followed global rates higher Thursday, while there is also little expectation officials there will tighten policy any time soon.
On equity markets Tokyo’s Nikkei ended 0.3 percent lower, while Hong Kong slipped 0.3 percent in the afternoon.
Sydney dived one percent, Seoul 0.3 percent lower and Singapore retreated 0.1 percent. Wellington, Taipei and Jakarta were also in the red. But Shanghai ended the day 0.2 percent higher.
Energy firms suffered hefty selling as oil prices tanked more than one percent, following a pick-up in US production while profit-taking kicked in after a surge of around 10 percent in the eight days up to the start of the week.
Market-watchers expect the crude market to continue seeing volatility as traders keep prices within a tight range above $40 and below $50 a barrel.
Eyes are now turning to the G20 summit in Germany, which is expected to be testy for Donald Trump owing to the North Korea crisis and following his outbursts over global trade, climate change and the North Atlantic Treaty Organization.
In early European trade London fell 0.1 percent, while Frankfurt and Paris were both flat.
– Key figures around 0720 GMT –
Tokyo – Nikkei 225: DOWN 0.3 percent at 19,929.09 (close)
Hong Kong – Hang Seng: DOWN 0.3 percent at 25,380.07
Shanghai – Composite: UP 0.2 percent at 3,217.96 (close)
London – FTSE 100: DOWN 0.1 percent at 7,329.73
Euro/dollar: DOWN at $1.1415 from $1.1421 at 2045 GMT
Pound/dollar: DOWN at $1.2954 from $1.2971
Dollar/yen: UP at 113.73 yen from 113.18 yen
Oil – West Texas Intermediate: DOWN 59 cents at $44.93 per barrel
Oil – Brent North Sea: DOWN 58 cents at $47.53
New York – DOW: DOWN 0.7 percent at 21,320.04 (close)
© Agence France-Presse