Times Media – May 6, 2016 – TOKYO/SINGAPORE — Asian shares wallowed at one-month lows on Friday as investors braced for the US April payrolls report after jobless claims data out earlier raised doubts over the seemingly rosy employment picture.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.9%, set for a weekly decline of 3.3%, the biggest drop in 12 weeks.
Japan’s Nikkei was down 0.7% as markets there resumed trading since closing for holidays on Tuesday.
The 0.8% slide in China’s Shanghai Composite index brought gains for the week to 1.1%. Wall Street shares were mixed on Thursday, with the S&P 500 index’s slight 0.02% drop nevertheless sending it to a three-week low.
“Recent global economic data and some corporate earnings from major Western firms have been lacklustre, leading to risk-off trading in markets,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
Economists polled by Reuters forecast Friday’s payrolls data will show US employers added 202,000 workers in April following a 215,000 increase in March, with the jobless rate holding at 5.0%. But job-related data published over the past couple of days have been softer than market expectations, casting a shadow on the expectation of solid job growth.
The number of Americans filing for unemployment benefits rose more than expected last week, posting the biggest gain in more than a year, although its four-week average, often seen as a better gauge of the underlying trend, still stood near a four-decade low.
Another report on Thursday showed a 35% surge in planned layoffs by US-based employers in April. Most of the announced job cuts were concentrated in the energy sector, which is reeling from low oil prices.
Yet another compilation, the ADP National Employment Report, showed US private employers added the fewest workers in three years in April, well below economists’ expectations.
The dollar index “is likely to rip higher if the nonfarm payrolls do not massively miss the market consensus, although the big undershoot in the ADP employment numbers this week has certainly highlighted risks to the downside”, IG market analyst Angus Nicholson wrote in a note.
The dollar index recovered from Tuesday’s 15-month low of 91.919 to trade at 93.733, on track for a 0.7% gain for the week.
The euro held steady at $1.1405, having fallen 0.7% on Thursday. It is heading for a weekly drop of 0.4%.
The yen, which jumped after the Bank of Japan (BoJ) stood pat on policy last week, changed hands at ¥107.08 to the dollar, off its one-and-a-half-year high of ¥105.55 set earlier this week. It’s set for a 0.6% decline for the week.
The Australian dollar slumped 0.9% to $0.7396, close to its two-month low of $0.7394 seen earlier in the session. The currency has been on a downward trend since a rate cut by the Reserve Bank of Australia (RBA) earlier this week, and is poised for a 2.7% loss for the week.
Investors also snatched up bonds, sending the 10-year US treasuries yield down to 1.735%, the lowest since April 18. It last stood at 1.7488%. The dollar’s strength weighed a little on oil prices on Friday, although a raging wildfire in Canada’s oil sands region that curbed output flowing mainly to the US kept losses in check.
US crude’s West Texas Intermediate (WTI) futures slipped 0.7% to $44.01 a barrel, but that followed a gain of 1.2% the previous day. They are on track for a 4.1% slide for the week.
Brent crude futures fell 0.6% to $44.73 a barrel after Thursday’s gain of 0.9%, set for a weekly decline of 7.1%.