Asian markets trade lower despite US gains

Asian markets trade lower despite US gains

Asian markets came under pressure on Friday with major indexes trading down, despite a positive finish on Wall Street overnight.

Down Under, Australia's ASX 200 was down 0.52 per cent, weighed by losses in the energy and financial sectors, down 1.37 and 0.71 per cent respectively.

Singapore shares opened 0.58 per cent higher, with the Straits Times Index at 2,573.45 in early trade, reported The Straits Times.

In Japan, the Nikkei extended losses, appearing set for a five-day losing streak, with the index falling 1.03 per cent on the back of a stronger yen. The dollar-yen pair fell to the 116-level, trading at 116.85 after market open; earlier this week, the pair was trading above 120.

Evan Lucas, market strategist at spreadbetter IG, said in a morning note, "[The BOJ's] negative rates have done nothing to slow the appreciation of the Japanese yen since last week. (BOJ Governor Haruhiko) Kuroda and Co.'s attempts to drive export competitiveness and more investment diversification from Japan in the current environment is a tough ask."

Japanese exporters were mostly down, with Toyota, Nissan and Honda seeing early losses between 2.30 and 3.83 per cent.

Across the Korean Strait, the Kospi initially opened down 0.28 per cent before retracing losses to trade flat.

Mining stocks in Australia were mostly in positive territory, with Rio Tinto and BHP Billiton gaining 2.06 and 2.39 per cent, respectively, boosted by upticks in commodity prices this week.

Shares of Nikon surged 7.47 per cent after reports said the company reported a 28 per cent increase in its net profit for April-December period.

Toshiba shares fell 5.64 per cent as the company projected a bigger-than-expected loss in the middle of mounting restructuring costs, following a $1.3 billion account scandal last year.

In Korea, Kakao shares were down 1.19 per cent after the technology company reported a net profit of 10 billion won ($8.4 million) in the fourth quarter.

With earnings season under way in the region, companies that are set to announce their results today include Nippon Telegraph, Toyota and Sumitomo.

Oil prices remained volatile overnight, after see-sawing between declines and gains of 5 to 8 per cent this week. US crude futures were down 56 cents, or 1.7 per cent, at $31.71 a barrel in the US session, while globally traded Brent slipped 58 cents, or 1.6 per cent, to $34.46.

Energy plays were mixed, with Australia's Santos down 1.27 per cent and Woodside Petroleum falling 0.77 per cent. In Japan, Inpex traded up 2.47 per cent, while South Korea's S-Oil gained 0.72 per cent.

Also on investors' radar is the recent move on the dollar index (DXY), where the dollar is weighted against a basket of currencies.

"The US dollar basket has lost 3.2 per cent since the close on Friday and 2.3 per cent in two days, with Wednesday being the worst single day in DXY in seven years," said Lucas.

He added, "The 36 per cent increase in the US dollar in 12 months is clearly putting a strain on US economic growth; US competitiveness has been squeezed and the Fed is isolated as the only central bank to be 'normalizing' monetary policy."

Loretta Mester, president of the Cleveland Federal Reserve, said overnight that volatility in financial markets as well as deflationary pressures from the plunge in energy prices shouldn't keep the US central bank from raising rates. Mester is a voting member of the Federal Open Market Committee's policy panel.

Major indexes on Wall Street closed up, with the Dow Jones industrial average gaining 79.92 points, or 0.49 per cent, to 16,416.5. TheS&P 500 was up 2.92 points, or 0.15 per cent, at 1,915.45, while the Nasdaq composite was higher by 5.32 points, or 0.12 per cent, at 4,509.56.

- Jeff Cox contributed to this report.

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