Markets in Asia deepened their losses for the week on Friday, as worries about an imminent rate increase by the U.S. Federal Reserve overshadowed the potential for stimulus by the European Central Bank.
In Japan, the Nikkei 225 index dipped 390.23 points, or 0.5%, to 17,792.16
In Hong Kong, the Hang Seng Index returned from holiday to drop 94.33 points, or 0.5% to 20,840.61
While traders got a break from the usual China stocks volatility — mainland markets have been closed the past two days for a national holiday — heavy selling on the back of persistent concerns about the state of China’s economy left regional stocks battered this week.
Shares in Japan fell 7% this week, their fourth straight week of losses and the biggest weekly drop since April 2014.
The sharp drop in Japan shares comes after foreigners sold a net 1.47 trillion yen ($12 billion U.S.) of Japanese stocks and futures contracts for the Nikkei and Topix, biggest combined net selling since 2007.
On Friday, the region began on a positive note — the Nikkei opened higher and shares in Hong Kong were up more than 1% in the morning — after signals from the ECB that it could further ease policy. ECB President Mario Draghi left the door open to more stimulus on Thursday, saying that ECB economists had lowered their economic growth and inflation forecasts.
But a U.S. jobs report out later today refocused investor attention on how a recovering U.S. economy might persuade the Fed to go through with a September rate increase.
Friday’s employment report is expected to show an addition of 220,000 jobs, according to economists surveyed by The Wall Street Journal. The unemployment rate is forecast to tick down to 5.2% from 5.3%.
The Japanese yen considered a haven asset during market turmoil, hit a fresh four-month high against the euro. The euro traded as weak as ¥132.54 on Friday, having fallen sharply yesterday on the back of the ECB’s comments.
Against the U.S. dollar, the yen was up 0.8% from late Thursday in Asia, with the U.S. dollar last at ¥119.15. Elsewhere, most Asian currencies moved lower against the dollar, on lingering concerns about the robustness of regional economies.
In other markets
In Korea, the Kospi index slumped 29.49 points, or 1.5%, to 1,886.04
In Singapore, the Straits Times Index docked 42.62 points, or 1.5%, to 2,863.81
In Taiwan, the Taiex index lost 95.35 points, or 1.2%, to 8,000.60
The NZX 50 slipped 22.79 points, or 0.4%, to 5,546.88
The ASX 200 Index gained 12.80 points, or 0.3%, to 5,040.60
