Asian markets down, yen weakens further

HONG KONG - Asian markets fell on Tuesday as profit-takers moved in to reverse earlier gains, but the dollar extended its recent upward trend against the Japanese yen.

The regional losses came despite another record close for the Dow Jones index on Wall Street, while Shanghai suffered another steep fall after the weekend's disappointing data on the Chinese economy.

Tokyo slipped 0.28 per cent, or 34.24 points, to 12,314.81, Seoul lost 0.5 per cent, or 10.01 points, to 1,993.34 while Sydney fell 0.56 per cent, or 29.0 points, to 5,117.9.

Hong Kong was 0.87 per cent lower, shedding 200.22 points to 22,890.60 while Shanghai lost 1.04 per cent, or 23.98 points, to 2,286.61.

The losses come after shares enjoyed a broad run-up in recent sessions as the Dow hit an all-time high.

The index continued its rally on Monday thanks to Friday's upbeat jobs numbers that has fuelled optimism over the health of the world's biggest economy.

"Expectations of a US economic recovery are strong," Daisaku Ueno, senior foreign exchange strategist at Mitsubishi UFJ Morgan Stanley told Dow Jones Newswires. The jobs data "changed the picture for the dollar/yen".

On Monday the Dow closed up 0.35 per cent, a seventh straight advance and a fifth consecutive record close.

The broader S&P 500 gained 0.32 per cent to sit just nine points below its own all-time closing high set on October 9, 2007. The Nasdaq added 0.26 per cent.

On currency markets, the dollar advanced further against the yen, with the Japanese unit facing continued pressure from expectations that the Bank of Japan will further loosen monetary policy.

The dollar was at 96.40 yen in Tokyo trade from 96.26 yen in New York late Monday.

The euro stood at $1.3009 and 125.34 yen, compared with $1.3046 and 125.59 yen in New York.

The yen came under extra pressure after a report in Japan's leading Nikkei economic daily Tuesday suggested the BoJ nominees might launch fresh easing measures before their first policy meeting next month, dealers said.

However, there are concerns over China after data over the weekend added to a number of weak indicators recently suggesting the country's pick-up may not be as strong as hoped.

Beijing said Saturday that inflation hit a 10-month high of 3.2 per cent in February while growth in industrial output and retail sales slowed.

Inflation is a key issue for the ruling Communist Party as it raises the chances of popular discontent over climbing prices and the threat of social unrest.

Investors are also worried the government will unveil more tightening measures to temper the rising cost of living.

Oil prices fell, with New York's main contract, light sweet crude for delivery in April, easing 32 cents to $91.74 and Brent North Sea crude for April delivery dipping 38 cents at $109.84.

Gold was at $1,582.70 at 1030 GMT compared with $1,578.34 late Monday.

In other markets:

Wellington rose 0.28 per cent, or 12.19 points, to 4,378.76.

Telecom rose 1.2 per cent to NZ$2.45 and Auckland Airport added 2.1 per cent to NZ$2.88 but Fletcher Building shed 1.7 per cent to NZ$9.10.

Manila fell 0.40 per cent, or 27.53 points, to 6,786.42.

Philippine Long Distance Telephone gained 0.34 per cent to 2,960 pesos but SM Investment rose 0.63 per cent to 1,104 pesos.

Taipei fell 0.55 per cent, or 44.01 points, to 7,994.71.

Fubon Financial Holding shed 4.32 per cent at Tw$42.1 while Taiwan Semiconductor Manufacturing Co was 0.49 per cent higher at Tw$102.5.

Bangkok ended flat, shedding 0.97 points to 1,576.68.

Telecoms company Advanced Info Service jumped 4.46 per cent to 234.00 baht, while oil company Bangchak Petroleum lost 3.42 per cent to 35.25 baht.

Singapore rose 0.31 per cent, or 10.05 points, to 3,303.02.

Real estate developer Capitaland gained 1.42 per cent to Sg$3.58 and United Overseas Bank increased 0.20 per cent to Sg$19.85.

Kuala Lumpur closed flat, slipping 1.42 points to 1,656.54.

Felda Global Ventures Holdings dipped 1.3 per cent to 4.71 ringgit, while Hong Leong Financial Group gained 2.1 per cent to 15.38 ringgit.

Mumbai fell 0.41 per cent, or 81.29 points, at 19,564.92 points.

Hindustan Unilever closed up 1.16 per cent at 444.10 rupees while Larsen & Toubro was down 0.49 per cent at 1,498.40 rupees.

Jakarta is closed for a public holiday.