Asian markets were mixed with mild profit-taking following a healthy week of gains, with the focus now on the release of US jobs data later in the day.
The euro extended losses seen in Europe and New York after the head of the European Central Bank said its board had talked about monetary easing and interest rate cuts, with the 18-nation zone threatened by deflation.
Tokyo’s benchmark Nikkei-225 index on Friday edged down 0.05 per cent, or 8.11 points, to 15,063.77, while Sydney closed up 0.24 per cent, or 12.9 points, at 5,422.8 and Hong Kong fell 0.24 per cent, or 55.00 points, to end at 22,510.08.
Seoul closed 0.28 per cent lower, or 5.61 points, at 1,988.09 and Shanghai added 0.74 per cent, or 15.13 points, to 2,058.83.
Taipei was closed for a public holiday.
With few catalysts to drive trade, investors took the opportunity to cash in gains after a broad global rally this week that has been fuelled by upbeat data including on manufacturing and US private-sector jobs.
Attention is now on the US non-farm payrolls release. The figures will provide dealers with a better handle on the strength of the economy following three months of softness caused by severe winter weather that hit most of the United States.
However, while a strong pick-up in employment will be welcomed, some investors fear that too-strong numbers could lead the Federal Reserve to speed up the tapering of its stimulus regime.
Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, said: “Solid jobs data is welcome, but numbers too robust may spark fears that the Fed may actually accelerate stimulus tapering.”
That could result in “another roiling effect”, he said.
The Fed’s decision to start winding down its stimulus program from January – citing improvements in the economy – hit world markets as investors repatriated their cash to the US in expectations interest rates will begin to rise.
On Wall Street on Thursday, the three main indexes retreated after surging in the previous sessions, while economic data were mixed.
The US services sector’s activity partly rebounded from a steep February fall, the country’s trade deficit widened more than expected, and weekly initial unemployment claims rose.
The Dow was flat, the S&P 500 slipped 0.11 per cent from Wednesday’s record close and the Nasdaq slid 0.91 per cent.
In currency trade, the euro suffered from European Central Bank president Mario Draghi’s vow to “act swiftly” if needed to keep deflation at bay.
In a news conference on Thursday after the bank held rates and stood pat on other easing measures, he said: “We will monitor developments very closely and will consider all instruments available to us.
“We are resolute in our determination to maintain a high degree of monetary accommodation and to act swiftly if required.”
BK Asset Management managing director Kathy Lien said Draghi was “unusually specific in saying that quantitative easing, another rate cut, negative deposit rates and a narrower rate corridor were all discussed at the meeting”.
In the afternoon, the euro bought $US1.3700 and Y142.27, compared with $US1.3717 and Y142.61 in New York and well down from the $US1.3763 and Y143.02 seen on Thursday in Tokyo.
The US dollar edged down to Y103.86 from Y103.94 in US trade.
Oil prices were mixed. New York’s West Texas Intermediate for May delivery rose 48 US cents to $US100.77 a barrel in afternoon Asian trade, while Brent North Sea crude for May was up 31 US cents at $US106.14.
Gold fetched $US1,289.15 an ounce at 1900 AEDT, up from $US1,286.75 late on Thursday.
In other markets:
– Wellington was flat, edging 1.53 points higher to 5,123.90.
Fletcher Building rose 0.74 per cent to $NZ9.59 and Air New Zealand was steady at $NZ2.03.
– Manila closed 0.39 per cent lower, shedding 25.88 points to 6,561.20.
SM Prime Holdings fell 0.65 per cent to 15.40 pesos, Ayala Land lost 0.63 per cent to 31.40 pesos and parent Ayala Corp dipped 0.82 per cent to 605.00 pesos.