Asian markets were mostly lower Friday, with Tokyo hit by a stronger yen and data showing household spending tumbled after a sales tax hike, while investors await the release of key manufacturing data next week.
The dollar continued to struggle in Asia after dipping on Wall Street following the release of data showing the US economy contracted more than expected in the first three months of the year.
Tokyo fell 0.34 percent, or 49.34 points to finish at 14,632.38, while Seoul slipped 0.86 percent, or 17.30 points to 1,994.96. Sydney also closed down, losing 0.49 percent, or 27 points, to end at 5,492.5.
Shanghai closed flat, edging down 1.39 points to 2,039.21 but Hong Kong was up 0.19 percent in the afternoon.
Japanese household spending in April fell 13.3 percent from March, official data showed, marking the biggest monthly drop since March 2011 when the country was hit by a quake-tsunami disaster.
The slump came in the same month a government hike in sales tax — from five percent to eight percent — took effect despite warnings that it could hit a nascent economic recovery.
Also, the government said inflation accelerated to 3.2 percent year on year in April from 1.3 percent in March largely owing to the effects of the tax rise.
The news comes as Bank of Japan weighs up whether to unveil fresh easing measures to support the economy after the tax rise, with a fears that further widening of the monetary base could fan inflation to more than its target of 2.0 percent.
— economy rebounding —
US stocks climbed on Thursday as investors brushed off news that the world’s biggest economy shrank 1.0 percent in January-March.
Analysts said that while the drop was more than expected, market players noted that it came during a severe winter freeze and the economy was already firmly rebounding.
There was also some cheer in figures showing new claims for unemployment insurance benefits fell sharply last week to 300,000, pulling the trend line to its lowest level in nearly seven years.
The S&P 500 added 0.54 percent to close at another record high, while the Dow rose 0.39 percent and the Nasdaq gained 0.54 percent.
Focus is now on the release next week of HSBC’s closely watched purchasing managers index (PMI) of manufacturing activity from China, the United States and Europe, hoping for signs of further improvement. China is also due to unveil its own official PMI on Sunday.
With last month’s readings for China showing a firm pick-up, there are hopes of another healthy result for May that would ease concerns over the Asian economic giant.
In foreign exchange trade the dollar slipped to 101.62 yen from 101.78 yen Thursday in New York, where investors left the greenback after the GDP data.
The euro bought $1.3606 and 138.29 yen against $1.3601 and 138.44 yen.
Oil prices were mixed. US benchmark, West Texas Intermediate for delivery in July, was down 12 cents at $103.46 a barrel after rallying 86 cents in Yew York Thursday. Brent North Sea crude for July gained six cents to $110.03.
Gold fetched $1,256.79 an ounce at 0710 GMT compared with $1,254.15 late Thursday.
In other markets:
— Taipei fell 0.36 percent, or 33.09 points, to 9,075.91.
Smartphone maker HTC shed 2.14 percent to Tw$160.0 while Taiwan Semiconductor Manufacturnig Co. was 2.05 percent lower at Tw$119.5.
— Wellington was flat,e edging down 4.73 points to 5,178.44.
Fletcher Building was off 2.08 percent at NZ$8.95 and Contact Energy was down 0.18 percent at NZ$5.45.