Japanese stocks fell for a fifth day after the yen strengthened against the dollar following a flurry of U.S. economic data that did little to change the view that the Federal Reserve will take a gradual approach to raising interest rates.
The Topix index declined 0.5 percent to 1,295.14 as of 9:01 a.m. in Tokyo, adding to last week’s drop of 4.7 percent, its worst weekly performance in two months. The Nikkei 225 Stock Average slid 0.4 percent to 16,095.23. The yen traded at 111.70 per dollar after strengthening 0.8 percent on Friday. Even with signs of life in American manufacturing and jobs data that topped estimates adding to optimism in the U.S. economy, traders still don’t expect higher interest rates until the fourth quarter.
Futures on the Standard & Poor’s 500 Index slipped 0.2 percent after the underlying gauge added 0.6 percent on Friday to close at the highest level this year. Optimism in the U.S. economy and expectations for only gradual Fed tightening overshadowed a selloff in oil.
Asian stocks headed for a fifth weekly gain as material and energy companies climbed after oil topped $ 40 a barrel. Japanese shares slid after the yen jumped against the dollar.
Equity gauges in China, Hong Kong, Australia and Singapore gained, while the MSCI Asia Pacific Index was little changed. The regional gauge is heading for a 1.6 percent five-day increase and the longest streak of weekly advances since July 2014. China stocks posted their steepest weekly gain since November while Manila’s benchmark index entered a bull market.
A comeback since mid-February led by commodity producers and financial shares has trimmed the regional equity gauge’s drop for 2016 to 2.4 percent. Oil’s more than 50 percent recovery from an almost 13-year low just five weeks ago has underpinned a revival in risk assets following a volatile start to the year for global markets.
Southeast Asian stocks are bouncing back from a bear market, outpacing global indexes as foreign investors pour in amid recovering economies. The MSCI South East Asia Index is up almost 20 percent from a closing low on Jan. 21. Other benchmark gauges are close behind Manila in recovering: Taiwan and Indonesia stocks are up 19 percent from last year’s lows.
Australia’s S&P/ASX 200 Index gained 0.3 percent as Commonwealth Bank of Australia rose 1 percent and BHP Billiton Ltd. surged 4.7 percent. Rio Tinto Group, which Thursday said Jean-Sebastien Jacques will takeover as its chief executive officer, added 1 percent.