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Sunday, August 14, 2022

Asian shares hit by US Fed fear, weak yen lifts Tokyo

Asian markets mostly fell on Monday after a better-than-expected rise in US job creation fuelled concerns the Federal Reserve will soon start to reel in its huge stimulus programme.

The dollar managed to hold on to its gains made in New York Friday against the yen after the non-farm payrolls figures, which add to a slew of data indicating the world’s number one economy is strengthening.

Tokyo was up 0.39 percent by the break thanks to the weaker yen, although it is off its earlier highs, while Hong Kong tumbled 2.32 percent, Sydney was 0.31 percent lower, Shanghai dropped 1.86 percent and Seoul was off 0.59 percent.

The Labor Department said Friday the US economy added 195,000 jobs in June, well above the consensus estimate of 166,000 jobs.

While the announcement shows the US recovery is gaining traction, investors fear the Fed will now start cutting back its $85 billion-a-month bond-buying that has been credited with fuelling a rally in global markets.

When the central bank unveiled the scheme in September to keep interest rates down it said it would keep it in place until the economy was able to support itself and when unemployment had fallen.

However, Wall Street welcomed the news. The Dow climbed 0.98 percent, the S&P 500 rose 1.02 percent and the Nasdaq added 1.04 percent.

The likelihood that there will be fewer dollars pumped into the financial system, while interest rates could rise sent the greenback higher in New York, climbing to 101.14 yen on Friday, from 100.21 yen earlier in the day in Asian trade.

In Tokyo on Monday the dollar rose to 101.25 yen.

The euro, which was already under pressure after the European Central Bank said it would keep rates at record lows for “as long as necessary” bought $1.2821, compared with $1.2832 late Friday. It was also at 129.74 yen from 129.78 yen.

In Seoul Asiana Airlines fell six percent after one of its planes crashed while landing in San Francisco at the weekend, killing two passengers and injuring 182 more.

Oil prices rose. New York’s main contract, light sweet crude for delivery in August, gained 24 cents to $103.46 a barrel in morning trade and Brent North Sea crude for August delivery added 23 cents to $107.95.

Gold was at $1,219.14 per ounce at 0230 GMT, compared with $1,239.70 late Friday.

Source: Reuters

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