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Asia shares fall as soft China data sours mood, yen slides

Published 11/19/2014, 09:24 PM
© Reuters. People in front of an electronic board, showing various stock prices, are reflected in a polished stone surface outside a brokerage in Tokyo
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By Shinichi Saoshiro TOKYO (Reuters) - Asian stocks mostly fell on Thursday as fresh data signaling a further loss of momentum in China's economy weighed on sentiment, while the yen slid to multi-year lows against the dollar and euro.

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) dropped 0.3 percent, briefly touching a three-week low.

The China flash HSBC/Markit manufacturing purchasing managers' index published on Thursday showed factory output contracted in the world's third-biggest economy for the first time in six months.

Hong Kong's Hang Seng (HSI) was down 0.1 percent and the Shanghai Composite Index (SSEC) lost 0.3 percent.

Further declines in oil and other commodities such as iron ore and coal prices weighed on some bourses. Australian shares (AXJO) shed 0.4 percent to give up this year's gains.

Tokyo's Nikkei (N225), on the other hand, edged up 0.1 percent, putting it within reach of a seven-year high that the index reached last week.

Supporting the index's gains was a weaker yen, which lifted shares of exporters.

The dollar hovered near a new seven-year peak of 118.275 yen reached early in the session.

The U.S. currency rose 1 percent overnight after the minutes of the Federal Reserve's last policy meeting showed its members were relatively unconcerned about the dollar's strength.

"The Fed has left the green light shining brightly for further USD gains," said Alan Ruskin, global head of currency strategy at Deutsche.

The Fed minutes also showed the central bank was still on track to raise interest rates next year, pushing U.S. Treasury yields higher.

The Fed's hints of confidence about the economy further highlighted the divergence in U.S. monetary policy relative to those of Europe and Japan. The European Central Bank and Bank of Japan are struggling to stave off deflation and shore up their shaky economies.

Beaten down by the dollar, the yen also slid against the euro. The euro traded near a six-year peak of 148.25 yen. The euro fetched $1.2535, off a three-week high of $1.2602 overnight.

The Australian dollar, sensitive to changes in China's economic performance, was down 0.3 percent to $0.8590.

In commodities, gold remained under pressure. It fell more than 1 percent on Wednesday after a poll showed weaker support among Swiss voters for a referendum that would require the Swiss National Bank (SNB) to boost its gold reserves.

If the "Save our Swiss gold" proposal is approved, the SNB would be banned from selling any of its gold reserves and would have to hold at least 20 percent of its assets in the metal, compared with 7.8 percent last month.

Spot gold was at $1,179.33 an ounce, off the week's high of $1,204.70 set on Tuesday.

U.S. crude oil futures extended their losses as the bullish dollar and an unexpected rise in U.S. stockpiles countered hopes of a possible OPEC output cut.

© Reuters. People in front of an electronic board, showing various stock prices, are reflected in a polished stone surface outside a brokerage in Tokyo

U.S. crude was down 9 cents at $74.49 a barrel.

(Additional reporting by Wayne Cole in SYDNEY; Editing by Richard Borsuk, Kim Coghill and Ryan Woo)

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