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Asia choppy after investors digest US tax reforms

Friday 03.20 BST

Overview

Equities fell on Friday in Asia as the region’s markets took their cues from an underwhelming session on Wall Street, while currencies walked back earlier moves amid mixed signals on the future of Nafta.

Hot topic

Asia-Pacific equities were choppy after Wall Street investors on Thursday digested the prospects of the Trump administration’s proposed tax reforms, while ECB president Mario Draghi offered an upbeat assessment of the eurozone’s economy.

In Sydney the S&P/ASX 200 was off 0.3 per cent, with gains of 2 per cent from the information technology segment offset by a 1 per cent drop in materials. Miner BHP Billiton was down 2.1 per cent after this week cutting production guidance for copper, iron ore and coking coal.

Tokyo’s Topix index shed 0.2 per cent as financial stocks suffered a 1.1 per cent drop. Shares in Nintendo rose as much as 2.9 per cent after the Kyoto-based games maker announced on Thursday after market close that its new Switch console had sold 2.74m units since launch in early March.

The Hang Seng index was down 0.2 per cent as segments lost across the board. Shares in Cheung Kong Property rose 0.7 per cent after the real estate group bought back 694,000 shares on Thursday for HK$38.3m. In China the Shanghai Composite index fell 0.3 per cent while the Shenzhen Composite rose 0.2 per cent.

Forex

Currency markets were cooling off on Friday after confusion over the Trump administration’s position on Nafta drove heavy trade in North American currencies on Thursday.

The Mexican peso was 0.2 per cent weaker at 19.0582 per dollar after strengthening as much as 1.5 per cent on Thursday on news the US would not immediately pull out of the North American Free Trade Agreement. The Canadian dollar was flat at C$1.3641, having firmed as much as 0.6 per cent the previous day only to close 0.1 per cent weaker.

The dollar index — tracking the greenback against a basket of peers — was up 0.1 per cent at 99.154.

Japan’s yen was 0.1 per cent firmer at ¥111.14 per dollar after a slew of data released on Friday showed consumer inflation held steady in March but industrial production contracted more sharply than forecast. The Australian dollar was up 0.1 per cent at $0.7471.

Fixed income

Sovereign bonds were mixed in Asia as the yield on 10-year US Treasuries, which moves inversely to price, dropped 1 basis point to 2.289 per cent.

Yields on 10-year Australian government bonds fell 3bp to 2.575 as stocks struggled in Sydney, while that on the equivalent Japanese government note was flat at 0.008 per cent.

Commodities

Crude oil prices were recovering in morning Asia trade after a sell-off during the Thursday session. Brent crude, the international marker, was up 0.5 per cent at $51.69 a barrel. West Texas Intermediate, the US marker, was up 0.7 per cent at $49.31.

Gold was up 0.1 per cent at $1,265.27 an ounce.

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