Asian shares fell on Friday after a rocky performance on Wall Street, while the yen hovered near two-week lows as traders wagered the Bank of Japan will add to its massive stimulus before too long.
European shares are also heading toward a lackluster start, with financial spreadbetters expecting Britain’s FTSE 100 to open as much as 0.2 percent lower, Germany’s DAX about 0.3 percent weaker, and France’s CAC 40 to start the day little changed.
Major U.S. stock indexes closed mixed on Thursday, with the Nasdaq Composite down 0.49 percent as Apple shares skidded to a two-year low on concerns about iPhone demand.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.1 percent, and was on track for a weekly drop of 1.2 percent, its third straight week of declines.
Hong Kong shares slipped 1.2 percent, poised for a 2.2 percent drop for the week.
Chinese shares started the day in positive territory but quickly retreated, with the CSI 300 down 0.3 percent and the Shanghai Composite losing 0.3 percent. They are on track to end the week lower, the former by 1.6 percent and the latter by 2.9 percent, after being hit earlier in the week by fears that Beijing may begin to taper its stimulus plans due to concerns about excessive debt.
Investors are looking to April Chinese bank lending data later in the day, and industrial output, investment and retail sales data on Saturday to give them more clues on whether the economy’s prolonged slump is bottoming out.
Japan’s Nikkei, which spiked briefly at the open, closed down 1.4 percent, as underperformance by Apple suppliers and the yen’s recovery following Thursday’s retreat snapped a five-day winning streak. The benchmark is up 1.9 percent for the week.
“Although investors remain cautious, they think Japanese stocks will eventually catch up with the strength in overseas stocks such as U.S. shares,” said Isao Kubo, equity strategist at Nissay Asset Management.
Shares of Nissan Motor Co rose 4.1 percent, while Mitsubishi Motors Corp slipped 1.7 percent on Friday, after Nissan agreed to buy a 34 percent stake in its smaller, scandal-hit rival on Thursday.
The yen rose 0.2 percent against the dollar on Friday to 108.79 after tumbling to a two-week low of 109.40 overnight, but remained well away from an 18-month high of 105.55 plumbed on May 3.
“The USD/JPY moved back into the 109 handle overnight, likely seeing Japanese policy makers breathe a sigh of relief,” Angus Nicholson, market analyst at IG in Melbourne, wrote in a note.
The yen has weakened in most recent sessions as investors pared long positions and Japanese officials explicitly warned about currency intervention.
Also undermining the yen, a prominent academic with close ties to BOJ Governor Haruhiko Kuroda said on Thursday that the Bank of Japan is likely to expand monetary stimulus either in June or July with an eye on first-quarter gross domestic product data and the outcome of this month’s G7 summit.
The euro was slightly lower at $1.1374.
Higher U.S. Treasury yields helped underpin the greenback, after two Federal Reserve officials said on Thursday that the U.S. central bank remains on track to hike interest rates this year, though they didn’t offer clues on the timeline for its tightening policy.
Cleveland Fed President Loretta Mester, who has been less cautious about future rate increases than many of her colleagues, said that inflation measures have moved higher. She said any uncertainty in the Fed’s economic forecasting should not stop the central bank from taking monetary policy decisions.
Boston Fed President Eric Rosengren, a voting member this year on the Fed’s rate-setting committee, said the central bank should raise rates again if second-quarter data confirms that the U.S. labor market is near full strength and inflation is on track to accelerate.
The yield on benchmark 10-year notes retreated to 1.7258 percent in Asian trade, after closing at 1.758 percent overnight.
Later on Friday, investors await a fresh set of U.S. economic readings, including retail sales data and the April producer price index.
Crude oil futures slipped, weighed down by the dollar and a warning by Russia that a global crude supply overhang could last into next year.
U.S. crude fell 0.8 percent to $46.34 a barrel, moving away from a six-month high of $47.02 hit on Thursday but still on track for a weekly gain of 3.8 percent.
Brent crude fell 0.6 percent to $47.81, and was poised to gain 5.4 percent this week.
The dollar’s recent strength has also sunk gold, which is heading for its worst weekly decline in seven weeks.
Spot gold recovered 0.9 percent to $1,275.20 an ounce as the dollar weakened on Friday, following a drop of 1.1 percent in the previous session, but remains on track for a weekly loss of 1 percent.