Asian Shares Mixed Ahead of U.S. Jobs Report
02 September 2016 - 04:20PM
Dow Jones News
Asian shares were mixed Friday as traders awaited the latest
U.S. jobs report, the strength of which could help determine the
timing of the next interest-rate increase.
A sooner-than-expected rate increase in September by the Federal
Reserve could pull foreign capital out of emerging markets in Asia,
analysts say, though a December rate increase would have already
been priced in by investors.
Australia's S&P/ASX 200 was down 0.9%, with the Nikkei Stock
Average flat, and Singapore's Straits Times Index falling 0.4%.
In South Korea, the Kospi was up 0.1%, holding steady after the
government revised its second-quarter economic growth figure to
3.3% on year, compared with 3.2% earlier.
The news also helped briefly boost the Korean won against the
U.S. dollar in early trade, though the U.S. dollar has since
recovered losses.
There is wide consensus among analysts that the U.S. central
bank will raise rates by a quarter of a percentage point in
December, though opinion is divided over a rate increase in
September.
Despite two strong jobs readings previously, disappointing
economic growth in the first half and turmoil in overseas markets
have kept the Fed on hold.
"The Fed had previously stated that the September rate hike
would depend on the jobs data," said Alex Wijaya, a senior sales
trader at CMC Markets. A strong jobs report on Friday will be
critical to the decision of raising rates this month, he said.
More than interest rates, the stability of the U.S. dollar will
likely affect trading strategies in Asia, analysts say.
"One of the reasons for the good performance of the Asian
markets was the relative stability of the U.S. dollar," said Frank
Benzimra, head of Asia equity strategy at Socié té Gé né rale. A
rate increase in the U.S. would send the dollar higher, affecting
Asian currencies and markets, he said.
Meanwhile, a recovery in crude prices helped energy stocks in
the region. Australia's Oil Search recovered to trade 0.1% higher
after falling 0.7% in early trade. However, Woodside Petroleum
extended losses to trade 2% lower.
In Asian trade, the price of Brent, the global crude-oil
benchmark, rose by about 1% to $45.88 a barrel.
Early in Friday's session, the Japanese yen rose against the
U.S. dollar, weighing on exports stocks, though the currency later
pared some of the gains.
Honda Motor traded 1.1% lower with Sharp down 1.4%. However,
Sony bucked the market's weakness to gain 1.8%, lifted by increased
confidence over its business prospects.
In Hong Kong, the Hang Seng Index gained 0.5%, adding to
Thursday's 0.9% rise, led by conglomerate CK Hutchison Holdings.
The stock jumped 3.5% to a five-month high after European
regulators on Thursday approved the company's Italian
telecommunications joint venture.
Goldman Sachs said the approval was line with its expectations,
and has kept the stock, which is controlled by tycoon Li Ka-shing,
rated as a "conviction buy."
Ese Erheriene and John Wu contributed to this article.
Write to Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
September 02, 2016 02:05 ET (06:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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