Asian markets fall, dollar sinks ahead of US jobs data

Asian stock markets fell and the dollar sank further against the yen on Thursday as traders nervously await the release of a crucial US jobs report later in the day.

At the end of a torrid week for the greenback that has seen it lose about four percent against the yen, economists said the non-farm payrolls data would determine its near-term direction.

The continued weakness of the US unit sent Tokyo stocks down again, with the Nikkei losing 0.21 percent, or 26.49 points, to end at 12,877.53.

Sydney finished 0.91 percent, or 43.5 points, off at 4,737.7, while in the afternoon Hong Kong was 1.23 percent lower and Shanghai shed 1.47 percent.

Seoul ended 1.80 percent, or 35.34 points, lower at 1,923.85. Samsung Electronics tumbled 6.2 percent, with traders blaming the fall on a JP Morgan research note suggesting the flagship Galaxy S4 smartphone may not be selling as well as hoped.

There are fears that a weak batch of job creation figures for May will highlight weakness in the US economy, fuelling another round of dollar selling.

The greenback has been under pressure all week following a series of poor data including on manufacturing and trade, while the Federal Reserve has also indicated that growth remains subdued.

Friday’s data will also be used to gauge the Federal Reserve’s next policy move amid expectations it is about to start pulling the plug on its monetary easing policy, also known as quantitative easing.

“Non-farm payrolls data… will determine near-term direction of stocks,” Tim Radford, global analyst at Rivkin, wrote in a note.

“Although a better than expected reading may indicate the Federal Reserve may look to reduce stimulus as early as September, the market should respond favourably,” he said, according to Dow Jones Newswires.

And William Leys, Premium Client Manager at CMC Markets, wrote in a note: “While a positive read will signal strength, it may also bring us closer to the end of the bond buying programme, which is a notion that still seems to unsettle the market.

“There is an apparent confusion over what constitutes the best case scenario for equities in the short term, fundamental strength or continued liquidity.”

The dollar stood at 96.77 yen in Tokyo, compared with 97.07 yen late Thursday in New York, where at one point it sunk as low as 95.88 yen. The greenback is down from more than 100 yen at the start of the week.

The euro bought $1.3245 and 128.15 yen, against $1.3243 and 128.55 yen.

The European single currency was given support after the region’s central bank held off another interest rate cut, while its head, Mario Draghi, offered some optimism for the troubled eurozone.

Despite the turmoil on forex markets, Wall Street’s main indexes ended in positive territory. The Dow rose 0.53 percent, the S&P 500 added 0.85 percent and the Nasdaq was 0.66 percent higher.

On oil markets New York’s main contract, West Texas Intermediate crude for delivery in July, gained 15 cents to $94.91 a barrel in the afternoon and Brent North Sea crude for July added 18 cents to $103.79.

Gold was at $1,413.19 by 0650 GMT from $1,405.75 late Thursday.

In other markets:

– Taipei ended flat, nudging down 0.94 points to 8,095.20.

– Wellington fell 0.35 percent, or 15.48 points, to 4,439.86.

Air New Zealand added 2.0 percent to NZ$1.51, while Telecom lost 2.0 percent and Fletcher Building shed 1.2 percent to NZ$8.29.