HONG KONG - Asian markets came under pressure on Friday as a successful bond auction in Spain failed to raise spirits while weak US economic data also added to the general sense of pessimism.
The euro was supported by comments from International Monetary Fund chief Christine Lagarde and Japan Finance Minister Jun Azumi who both said the IMF would achieve its goal of raising enough cash for a firewall against future debt crises.
Tokyo fell 0.28 per cent, or 27.02 points, to 9,561.36, Seoul shed 1.26 per cent, or 25.21 points, to 1,974.65 and Sydney ended flat, edging up 3.8 points to 4,366.5.
Hong Kong ended flat, adding 15.63 points to 21,010.64 while Shanghai closed 1.19 per cent, or 28.23 points, higher at 2,406.86 on hopes China will announce monetary easing measures soon after comments to that effect from a central bank official this week.
Spain's Treasury on Thursday raised a higher-than-expected 2.541 billion euros (S$4.18 billion) in its issue of two and 10-year bonds at rates below the key six per cent that raises alarm bells for investors.
The results came after Madrid on Tuesday enjoyed an above-target auction of 12 and 18-month bonds.
With the eurozone debt crisis returning to the fore the focus is now on Spain, which has a gaping public deficit and unemployment above 20 per cent, with fears it could follow Greece, Portugal and Ireland into asking for a bailout.
The auction came as world finance leaders began a two-day meeting in Washington that will discuss bolstering an International Monetary Fund (IMF) firewall against future crises like the one in Greece last year.
Earlier this week, Japan said it would pledge US$60 billion (S$5.25 billion) after Lagarde called for a global effort to raise US$400 billion. She had earlier targeted US$500 billion but it was lowered on easing concerns over the global economy.
Sweden, Norway, Denmark and Poland are among the nations that have pledged billions of dollars.
Lagarde said in Washington that Spain did not need an IMF rescue as long as Europe keeps working to help the government with its reforms.
"There is no such need at the moment as I understand," she told Bloomberg Television.
And referring to the emergency fund target, Largarde said "we expect our firepower to be significantly increased" after the meeting, while Azumi later echoed her sentiment.
The comments provided support to the euro, which held on to gains made against the dollar and yen after the latest Spanish bond sale.
In morning Asian trade, the single currency bought US$1.3141 and 107.20 yen (S$1.66), compared with US$1.3134 and 107.19 yen in New York late Thursday.
The dollar was changing hands at 81.54 yen, slightly down from 81.60 yen.
In the United States, new claims for unemployment benefits only inched lower last week, data showed, as several weeks of confidence-building falls appear to be coming to an end.
The Labor Department also said that the number of people claiming in the previous week was higher than previously reported.
Also, mid-Atlantic manufacturers saw business conditions this month decline more than anticipated, while sales of previously owned homes fell in March for the second consecutive month and missed expectations.
"While stronger-than-expected US data has been the common theme in recent times, a general lack of continuity continues to plague the market," said Chris Gore, Melbourne-based currency analyst at GO Markets, in a note.
And he added that there was "little in the way of solid evidence to suggest the economy is on a sustained upside trajectory", according to Dow Jones Newswires.
The Dow shed 0.53 per cent, the broader S&P 500 was down 0.59 per cent and the Nasdaq fell 0.79 per cent.
On oil markets, New York's main contract, West Texas Intermediate crude for delivery in May, was up US$1.00 to US$102.73 103.27 per barrel while Brent North Sea crude for June gained 58 cents to US$118.58 in late afternoon.
Gold was at US$1,645.30 an ounce at 0820 GMT, compared with US$1,640.00 late Thursday.
In other markets: - Taipei closed 1.52 per cent, or 115.54 points, lower at 7,507.15. TSMC shed 1.75 per cent to Tw$84.3 (S$3.58) while Chunghwa Telecom was 0.79 per cent lower at Tw$87.6. - Manila fell 0.33 per cent, or 16.82 points, to 5,156.46. Metropolitan Bank and Trust fell 1.52 per cent to 90.50 pesos (S$2.65), while Ayala Corp. dropped 2.02 per cent to 416.20 pesos. - Wellington fell 0.25 per cent, or 8.96 points, to 3,516.23. Fletcher Building slipped 2.39 per cent to NZ$6.13 (S$6.31), Telecom was 1.19 per cent lower at NZ$2.50 and Contact lost 0.41 per cent to NZ$4.89.