Asian shares slip in holiday-thinned trade, focus turns to U.S. data
TOKYO Asian shares struggled on Thursday after a lacklustre performance on Wall Street, with investors looking to U.S. economic data later in the day for potential catalysts even as markets started winding down ahead of the holidays.
MSCI’s broadest index of Asia-Pacific shares outside Japan erased early modest gains and slipped 0.3 percent, while Japan’s Nikkei stock index was down 0.2 percent.
U.S. stocks, which have been on a tear since the Nov. 8 election on bets that the incoming administration of Donald Trump will embark on growth-stimulating policies, pulled back from the record highs logged in the previous session.
“There weren’t any major market-making data points coming out, and I think that’s why the markets are kind of taking a breather,” said Jennifer Vail, head of fixed income research at U.S. Bank Wealth Management in Portland, Oregon.
Later on Thursday, the United States will release a third revision of U.S. third quarter gross domestic product.
“It could be a volatile day if it comes in either substantially stronger or substantially weaker,” she said.
Durable goods orders for November and weekly initial jobless claims were also scheduled to be released.
Thin liquidity could also amplify moves, with many investors already departing ahead of this weekend’s Christmas holiday. Markets in Tokyo will be closed on Friday for the Japanese Emperor’s birthday.
The dollar was flat on the day against its Japanese counterpart at 117.58 yen, below its 10-1/2-month high of 118.66 touched on Dec 15.
The euro was up 0.2 percent at $1.0438, struggling to pull away from Tuesday’s low of $1.0352, which was the single currency’s deepest nadir since January 2003 as it came under pressure from the ascendant dollar and fears over Italy’s bank crunch.
Troubled bank Monte dei Paschi di Siena expects to burn through around 11 billion euros of liquidity more quickly than previously forecast, an updated document on the bank’s website showed on Wednesday.
The dollar index, which tracks the greenback against a basket of six rival currencies, slipped 0.1 percent to 102.940, as investors stepped back after its rise to a 14-year peak of 103.650 earlier this week.
“There’s a lot of year-end book-closing and position-squaring, and less in terms of data and events to go on,” said Mitul Kotecha, head of FX strategy at Asia-Pacific for Barclays in Singapore.
“So all of that suggests we might see more consolidation going through the year-end,” he said.
Crude oil prices firmed after facing pressure overnight by a report showing a surprise build in U.S. crude inventories last week, as well as news that Libya expects to boost production over the next few months.
But the contract roll for front-month U.S. crude to the higher-priced February from lower-priced January pushed U.S. crude up about 0.5 percent. It was last up 0.3 percent at $52.65 per barrel. Brent crude rose 0.4 percent to $54.65.
Spot gold was nearly flat at $1,130.40 an ounce, bolstered as the U.S. dollar retreated from this week’s highs.
(Reporting by Tokyo markets team; Editing by Eric Meijer)
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