Stronger yen hits Japan shares, lower yields pressure dollar

Tags: Stock Market
Asian shares were under pressure on Friday, with Japanese stocks skidding as the yen rose against the dollar, which has struggled in recent days on the back of lower U.S. Treasury yields.

A second day of losses on Wall Street pulled MSCI's broadest index of Asia-Pacific shares outside Japan down 0.4 percent. The index has gained about 2 percent on the week during which Wall Street set the tone by climbing to record highs.

Tokyo's Nikkei stock average dropped 1.6 percent, dragged lower by the yen's gains against the dollar, which could put pressure on the earnings of Japanese exporters. The Nikkei has shed 0.9 percent so far this week.

The dollar traded little changed at 101.53 yen, off a two-month low of 101.31 yen hit Thursday on the back of a continued decline in U.S. Treasury yields. The dollar is poised to end the week about 0.25 percent lower versus the Japanese currency.

Benchmark U.S. Treasuries yields fell to six-month lows on Thursday after Greek government bonds weakened and sparked a safety-bid for U.S. debt, even though U.S. economic data pointed to a firming economy. [US/]

"U.S. yields may not stabilize until we have consistent improvements in U.S. data, which means that for the time being, the trend in the greenback could still be lower," Kathy Lien, managing director of FX strategy for BK Asset Management, wrote in a note to clients.

The dollar has fared better against the euro, with the common currency poised to lose about 0.3 percent on the week, weighed down by expectations for the European Central Bank to ease monetary policy in June.

Weak euro zone GDP and muted inflation data further fuelled easing expectations on Thursday.

The euro traded little changed at $1.3715 after dropping to a 2-1/2-month low of $1.3648 on Thursday on ECB easing prospects.

In commodities, gold stood little changed at $1,296.10 an ounce following a fall of almost 1 percent on Thursday after a drop below the $1,300 threshold triggered technical selling. Upbeat U.S. jobless claims data and consumer prices also reduced gold's safe-haven appeal [GOL/]

Nickel on the London Metal Exchange (LME) traded little changed at $18,770 a tonne, having slumped more than 6 percent on Thursday, erasing much of May's spectacular gains. Nickel is still up 35 percent this year. [MET/L]

LME copper also traded flat, at $6,889 a tonne, from the previous session, but a stone's throw from Wednesday's two-month peak of $6,940 a tonne. Copper was on track for a weekly gain of around 2 percent, its biggest weekly advance in seven weeks.

U.S. crude futures rose on Friday, heading for their biggest weekly gain in five weeks on the back of a resurgence of tensions in Ukraine and upbeat U.S. economic data. U.S. crude for June delivery was up 40 cents at $101.90 a barrel.

EDITORIAL OF THE DAY

  • Stricter deterrent must to force defiant promoters to buy back shares

    The Securities and Exchange Board of India’s (Sebi’s) decision to delist companies that have been suspended from trading on stock exchanges for mo

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Amita Sharma

Political rhetoric makes for counter poetry

Poetic flourishes flavour politics. Ghalib and Hafez flowed profusely to ...

Zehra Naqvi

Watch your words, for they can kill

You must’ve heard the ph­rase ‘if looks could kill’. Ever ...

Dharmendra Khandal

Biodiversity day has come and gone. Yet again

Every year on May 22, world celebrates international biodiversity day. ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture