Asia wavers, but Wall Street gains lend support

TOKYO - Asian shares wavered between positive and negative territory on Friday, as a late earnings-led surge on Wall Street helped counter persistent concerns over global growth and sagging Chinese shares.

Spreadbetters predicted the US lustre would rub off on European bourses when they opened, with Britain's FTSE 100 expected to open up around 19 points, or 0.3 per cent; Germany's DAX to gain about 58 points, or 0.5 per cent; and France's CAC 40 to rise 34 points, or 0.7 per cent, according to IG.

"With Asian markets generally supported, we should see a positive open in Europe," Chris Weston, chief market strategist at IG, wrote in a note.

"We all know European markets have performed strongly as traders priced in the idea of liquidity making its way into the equity market," he said.

MSCI's broadest index of Asia-Pacific shares outside Japan edged down about 0.2 per cent on the day in late trade, but was still on track to gain more than 1 per cent for the month.

The Shanghai Composite Index lost 1.0 per cent, set for a fourth consecutive day of declines, as this week's investigations into stock margin trading made investors wary.

Overall, though, regional sentiment got a lift from Thursday's US gains, which saw major US indexes surging almost 1 per cent or more as Apple Inc and Boeing Co extended gains after strong earnings reports this week.

US jobless claims figures also helped bolster the mood, with the number of Americans filing new claims for unemployment benefits last week marking its biggest weekly decline since November 2012, falling to its lowest since April 2000.

Japan's Nikkei stock average added about 0.4 per cent, clawing back some of the 1.1 per cent lost the previous session, its biggest one-day drop in two weeks. Strong company earnings led by Nomura Holdings and Advantest Corp buoyed sentiment, but a sell-off in index-heavyweight SoftBank Corp limited the gains.

For the week, the Nikkei gained 0.9 per cent, and added 1.3 per cent for the month.

Mostly upbeat data released before the market open showed Japan's core consumer inflation slowed for a fifth straight month in December due to slumping oil prices, though factory output rose 1.0 per cent, helped by a much-awaited rebound in exports and the jobless rate fell.

"Overseas catalysts still dominate the Japanese market's mood. But with quarterly results being released now, investors are seeing if there is any forward-looking indication on how companies will perform in 2015," said Masaru Hamasaki, head of the market & investment information department at Amundi Japan.

The US dollar slipped against its Japanese counterpart, losing about 0.4 per cent to 117.83 yen (S$1.35).

According to Japanese government and central bank officials, the Bank of Japan has put monetary policy on hold and found backing for its wait-and-see stance from advisors to Prime Minister Shinzo Abe, who worry more easing could send the yen to damagingly low levels.

This newfound caution means Japan is set to be an outlier at a time when central banks from Canada to the euro zone to Singapore have eased policy to prop up faltering growth and defuse deflationary pressures.

Expectations of further easing from the Reserve Bank of Australia sent the Australian dollar slumping to its lowest in over five years this week, with the Aussie falling as low as US$0.7720 (S$1.04). It was last up about 0.2 per cent on the day at US$0.7777.

The euro added about 0.2 per cent to US$1.1337, moving further away from this week's 11-year low of US$1.1098.

US crude edged down to US$44.50 a barrel, moving back toward a nearly six-year low touched overnight on data that showed a rise in already record-high US oil inventories.

Spot gold was up about 0.2 per cent at US$1,259.10 an ounce after falling more than 2 per cent to a two-week low overnight on concerns over a looming increase in US interest rates. Gold is still on track to post its biggest monthly gain in almost a year.

Investors were likely to remain cautious ahead of fourth-quarter US gross domestic product data later on Friday. A Reuters poll tipped the economy to have grown 3.0 per cent.