Asian stock markets lose ground as strong yen weighs on Japanese shares

Thursday, October 7, 2010

Asian shares retreat as strong yen batters Japan

TOKYO — Asian stock markets fell Friday as a strong yen dragged on Japanese shares and investors pared bets ahead of a key U.S. jobs report later in the day.

The Nikkei 225 stock average fell 35.27 points, or 0.4 percent, to 9,650.48 after the Japanese currency hit a new 15-year-high against the dollar. The dollar fell to 82.12 yen at one point Thursday in New York.

Many exporters retreated, with Nintendo Co. down 0.7 percent and Canon Inc. off 0.5 percent.

Bucking the trend was electronics giant Panasonic Corp., which surged almost 3 percent after announcing Thursday that its tender offers for Sanyo Electric and Panasonic Electric Works had been successful. The company now has stakes of more than 80 percent in both companies.

Elsewhere, South Korea’s Kospi lost 0.3 percent to 1,896.67, Australia’s S&P/ASX 200 was down 0.1 percent at 4,684.40 and Taiwan’s benchmark fell 0.2 percent to 8,267.19.

Shares in mainland China jumped, with investors playing catch-up as financial markets reopened after the National Day holidays. The Shanghai Composite index vaulted 3.3 percent to 2,742.81.

On Wall Street, the Dow Jones industrial average fell 19.07, or 0.2 percent, to close at 10,948.58.

Slightly better news on claims for U.S. unemployment insurance gave stocks there an early lift, but the gains faded quickly as traders opted for caution ahead of Friday’s employment report from the Labor Department, the most crucial piece of news on the economic calendar.

The Standard & Poor’s 500 index fell 1.91, or 0.2 percent, to 1,158.06, while the Nasdaq composite rose 3.01, or 0.1 percent, to 2,383.67.

Gold, which is considered a safe alternative to the dollar, hit another record of $1,366.00 an ounce Thursday before pulling back to $1,335.00.

Investors are worried Japan’s central bank could act as soon as this weekend to intervene in currency markets, said George Gero, vice president of global futures at RBC Capital Markets. Gold has become the go-to hedge against inflation. If Japan’s actions strengthen the dollar, it could change the investment calculus in gold.

In currencies, the dollar fell to 82.31 yen from 83.39 yen late Thursday in New York. The euro rose to $1.3949 from $1.3917.

Benchmark crude was down 5 cents at $81.62 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.56 to settle at $81.67 a barrel on Thursday.

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