Asian markets turn south ahead of US jobs report

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Asian markets retreated today following another cautious session on Wall Street on Thursday.

Investors have headed to the sidelines as they digest the Federal Reserve’s most recent policy meeting and await the closely-watched US jobs report due later on Friday.

Central banks have been a key focus this week. The Bank of Japan, Federal Reserve and Bank of England have all kept monetary policy on hold this week and have all struck relatively upbeat tones in their commentary.

Although the Fed still looks on track to raise interest rates this year, the prospect of tighter policy looks to be offering less support to the US dollar. Rather, growing uncertainty around the impact of US President Donald Trump’s fiscal policies have reversed the greenback’s rally since he was elected in November. The US dollar index was flat today at 99.803, close to a two-and-a-half-month-low.

US employment data is the release to watch. The economy is expected to have added 180,000 jobs in January and the unemployment rate is expected to remain steady at 4.7 per cent, according to the median estimate of analysts surveyed by Bloomberg.

Chinese markets opened for the first time in a week as the lunar new year public holiday ended. The Shanghai Composite was down 0.4 per cent, while the technology-focused Shenzhen Composite eased 0.3 per cent.

Hong Kong’s Hang Seng, which has been trading since Wednesday, was off 0.7 per cent and Australia’s S&P/ASX 200 was 0.2 per cent lower.

Japan’s Topix pared early gains to be flat as a stronger yen put pressure on exporters.

The yen was 0.2 per cent stronger at ‎¥112.58 per dollar and was on track for its fourth advance in five sessions and a 2.2 per cent gain for the week. The currency seesawed as the Bank of Japan surprised markets with the size of its bond purchases today.

The Australian dollar eased 0.1 per cent to $0.7648, eyeing its first decline in six sessions.

With Chinese markets open again, the renminbi was trading at Rmb6.8703 per dollar, 0.2 per cent stronger than its previous trade a week ago.

Yields on Japanese government bonds were whipped around on Friday after the BoJ bought more bonds than expected in its market operations. The 10-year JGB yield was up 2.7 basis points at 0.143 per cent. Yesterday it closed above 0.1 per cent for the first time since January 29, 2016 when the BoJ decided to cut interest rates into negative territory for the first time.

Oil markets were firmer, with Brent crude, the international benchmark, up 0.6 per cent at $56.88 a barrel and West Texas Intermediate up 0.5 per cent at $53.82. Gold was down 0.2 per cent at $1,213.43 an ounce.

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