* Most markets in Asia, Europe shut for Labour Day, UK
shares seen flat
* MSCI Asia ex-Japan down 0.1 pct, Nikkei falls 0.3 pct
* China official April PMI eases from March's 11-month high
* Fed policy ends later on Wed, ECB meets Thursday
By Chikako Mogi
TOKYO, May 1 The dollar eased on Wednesday as
investors warily awaited the outcome of the U.S. Federal
Reserve's policy meeting later in the day, while expectations
for the European Central Bank to cut interest rates on Thursday
capped the euro.
Financial bookmakers were predicting London's FTSE 100
would open nearly flat, with most other European markets
shut for the Labour Day holiday.
U.S. stock futures were also little changed --
hinting at a subdued Wall Street open after the Standard &
Poor's 500 Index settled at an all-time high on Tuesday.
MSCI's broadest index of Asia-Pacific shares outside Japan
inched down 0.1 percent, retreating from
Tuesday's seven-week high, and dragged down by a 0.3 percent
fall in Australian shares which reached their highest in
nearly five years in the previous session. Most Asian bourses
The highlight of the session was China's official purchasing
managers' index (PMI) for April. Growth in China's manufacturing
sector unexpectedly slowed in April to 50.6 from an 11-month
high of 50.9 in March as new export orders fell, raising fresh
doubts about the strength of the economy after a disappointing
The Australian dollar hit a session low of $1.0364,
but reaction was generally muted.
"It looks like China is in a situation where sluggish growth
is going to continue for longer, which is not great from a
commodities point-of-view," said Damien Boey, an equity
strategist at Credit Suisse in Sydney. Australian markets are
sensitive to data from China, its biggest trading partner.
London copper dropped 0.5 percent to $7,020 a tonne
as the weak data from top consumer China fuelled demand
"PMIs do tend to come off in April and May, so there is a
seasonal aspect, but it's still pretty negative and our Chinese
economists are quite bearish right now so that's not great for
metals," said Natalie Rampono, analyst at ANZ Bank in Melbourne.
U.S. crude futures fell 0.5 percent to $93 a barrel
and Brent slid 0.9 percent to $101.47.
Japan's Nikkei stock average eased 0.3 percent on
some disappointing earnings guidance. The Nikkei posted its best
April in 20 years, reflecting a sharp improvement in investor
sentiment as Japan adopts aggressive policies to end its
stubborn deflation and bolster growth.
DOLLAR CONFIDENCE FALTERING
The dollar was vulnerable, staying near lows against a
basket of six major currencies which hit its lowest since
the end of February at 81.598 on Tuesday.
The dollar edged down 0.1 percent against the yen to 97.27
, losing the momentum it needs to challenge the symbolic
100 yen after touching a four-year high of 99.95 yen last month.
The dollar has come under pressure recently after a mixture
of weak manufacturing, jobs and growth data for the first three
months of 2013 and more positive reports for the housing market.
Optimism over the U.S. recovery was the main driver behind
this year's rallies in riskier investments, especially U.S.
stocks, overshadowing weak spots emerging in China and the euro
zone's deteriorating economy.
"The recent weak data has cast doubt over upbeat economic
views forecast at the start of the year which had led to
speculation about the Fed tapering its aggressive stimulus later
this year," said Takao Hattori, senior investment strategist at
Mitsubishi UFJ Morgan Stanley Securities.
"Investors are now concerned that data for the current
quarter may be weaker than previously thought, and are starting
to push back the timing of a shift in the Fed's stance. This is
prompting dollar selling."
In this light, the U.S. non-farm payrolls report for April
due on Friday is key in gauging the economic trend for the
second quarter, Hattori said. March's number came in well below
expectations, at 88,000, triggering a sell-off in riskier
In April consumer confidence rebounded while the Institute
for Supply Management-Chicago business barometer unexpectedly
contracted to its lowest level since September 2009.
Spot gold edged down 0.1 percent to $1,474.55 an
ounce on a lack of physical buying and before the Fed's
While accommodative policies are generally seen as
supportive for gold, the metal has not necessarily moved in
tandem, noted Edward Meir, a metals analyst at futures brokerage
"Instead, it seems to pick up steam either as a result of
turmoil in the financial markets or on the back of higher
inflation readings, neither of which seem to be prevalent at
this particular time."
The euro held steady around $1.3168 against the
dollar but eased 0.1 percent against the yen at 128.07 yen
"We think meaningful EUR moves will be driven by three
fairly unrelated factors, none of which relates to monetary
policy in the eurozone," Barclays Capital said in a research
note, referring to the effect of a weak yen on Germany's growth,
the likely impact from Italy's new coalition government's
austerity policies, and a recovery in the U.S. economy.