Asia stocks slip, euro languishes at 11-year low before ECB

Asia stocks slip, euro languishes at 11-year low before ECB
A man is reflected on an electronic stock quotation board outside a brokerage in Tokyo.

TOKYO - Asian stocks slipped on Thursday after Wall Street continued to pull back from record highs ahead of Friday's closely-watched US jobs data, while the nervous euro languished at an 11-year low prior to the European Central Bank's policy meeting.

MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.4 per cent with Australian, Malaysian and Chinese stocks posting losses.

Still, optimism stemming from widespread monetary easing supported other stock markets.

Japan's Nikkei edged up 0.2 per cent and South Korea's Kospi inched 0.1 per cent higher.

"Foreigners are continuing their buying spree on the back of increased global liquidity after quantitative easing by the ECB," said Lee Kyung-min, economist at Daishin Securities Co in Seoul.

Before slipping on Tuesday for the second successive session, both the Dow and S&P hit record highs on Monday, when the Nasdaq reached a 15-year peak.

Risk asset markets, shored up by liquidity provided by easing-minded central banks around the world, will have a chance to confirm the ECB's easing stance when it holds a policy meeting later in the session.

The ECB, which starts its quantitative easing (QE), or bond-buying, programme of more than 1 trillion euros this month, is expected to detail the plan after the meeting.

Edgy before the ECB's announcement on details of its QE scheme, the euro fell as far as $1.1061, a low not seen since September 2003.

"This (ECB 1 trillion euro programme) would not be so euro negative if the Federal Reserve were doing the same thing but not only did the US central bank end its QE last October, but they are looking to take the next step and raise interest rates," said Kathy Lien, managing director for forex strategy at BK Asset Management.

"It is the reminder of this divergence that has driven EUR/USD to fresh 11-year lows."

The euro's weakness helped the dollar index rise to a new 11-year high of 96.059.

Often waxing and waning, expectations that the Fed would raise rates as early as summer have fueled the dollar's recent rally.

The global markets will look to Friday's US jobs data for further confirmation that the world's largest economy is recovering enough to justify a rate hike.

Economists polled by Reuters projected US payrolls grew 240,000 in February, following growth of 257,000 in January.

The dollar stood little changed at 119.78 yen and still some distance from a three-week peak of 120.27 struck earlier in the week thanks to a spike in US Treasury yields.

The 10-year Treasury note yield was at 2.117 per cent after edging up to a two-week high of 2.142 per cent overnight.

The Australian dollar received a slight lift when the Reserve Bank of Australia's deputy governor said the currency was much closer to an appropriate level than it has been for the past few years.

The Aussie was up 0.1 per cent at $0.7826. The currency hit a six-year low of $0.7627 early in February after the RBA cut interest rates to a record low. The RBA stood pat on policy earlier this week, but observers expect it to cut rates again sooner or later.

In commodities, US crude oil added to overnight gains, rising 0.3 per cent to $51.66 a barrel. OPEC member Iran stressing that it opposed a timeline for a freeze on nuclear activities buoyed the crude market on Wednesday.

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