Hong Kong: Asian stocks were broadly lower on Friday after fresh data from the United States stoked concerns that expected monetary easing by the Federal Reserve may not be enough to kickstart the struggling economy.
The possible pump-priming kept the dollar under pressure after it broke below the ¥81 level in New York while almost hitting parity against the Australian dollar.
But comments from Japan’s finance minister Yoshihiko Noda that authorities would step in to cap the yen’s rise prevented the greenback falling further, while Prime Minster Naoto Kan said he was “very concerned” by the situation.
Tokyo slipped 0.72% by the break as the strong yen hurt exporters, Hong Kong was 0.38% lower, Sydney fell 0.45% and Seoul edged 0.06% lower.
Singapore added 0.41% and Shanghai was 0.42% higher.
Markets were also hit by profit-taking after two days of strong gains across the region that were fuelled by hopes of easing in the United States.
The US central bank is expected to announced a series of measures to boost recovery in the world’s biggest economy when its policy committee meets at the start of next month.
Minutes from last month’s meeting of the committee said the central bank was prepared “to provide additional accommodation if needed”.
Those expectations were given strength Thursday after Washington said new claims for unemployment benefits rose 13,000 last week, to 462,000, well above the forecast 450,000.
The previous week’s claims figure was revised upward to 449,000, from 445,000. At the same time the US trade deficit jumped to 46.3 billion dollars in August as the gap with China hit a new record high, according to the Commerce Department.
But Mark Smith, economist at ANZ bank in Wellington, said: “Further (quantitative easing) by the Federal Reserve in early November is looking increasingly inevitable although doubts remain on the size of the package and its effectiveness.”
“Investors are starting to realise that looser US monetary policy may not be the magic bullet they were hoping for,” he told Dow Jones Newswires.
The yen was sitting at 81.40 to the dollar in Tokyo morning trade, after falling to 80.89 in New York Thursday. The Australian dollar was at 99.10 US cents after almost reaching parity at 99.94 at one point.
And the Singapore dollar, which struck a record 1.2938 against the greenback on Thursday, was at 1.2978 in Friday trade.
When asked about the strength of the yen Japan’s Kan on Friday told parliament: “I am very concerned about the current situation.”
He added: “The G20 has agreed that excessive fluctuations in the currency market are not desirable. In this sense, the yen’s abrupt rise is also seen as such an excessive fluctuation.”
His comments came after his finance minister told reporters the government would take “decisive steps when necessary” to avert excessive exchange rate fluctuations.
“Our basic position has not changed,” he said, adding that he was watching the currency market “with great interest.”
Japan last month stepped into the currency markets for the first time in six years after the dollar slumped to a 15-year low against the yen.
New York’s main contract, light sweet crude for November delivery, fell four cents to $82.65 a barrel.
Brent North Sea crude for delivery in December gained a cent to $84.21 a barrel in its first day of trade.
Gold opened at $1,379.00-1,380.00 US an ounce in Hong Kong, down from Thursday’s close of $1,383.00-1,384.00.