TOKYO Jan 7 Asian shares stabilised on Tuesday
after four straight days of losses, while the dollar was on
defensive after disappointing U.S. services sector data raised
concerns about stuttering growth in the world's largest economy.
MSCI's broadest index of Asia-Pacific shares outside Japan
was flat, having fallen 2.3 percent in the
previous four sessions.
Japan's Nikkei index pointed to a softer open after
futures fell 0.6 percent overnight, extending a 2.4 percent
decline on Monday, its first trading day of 2014.
U.S. stocks slipped on Monday after a mixed batch of
economic reports, resulting in the Standard & Poor's 500
losing in the first three trading sessions of 2014 after ramping
up 30 percent last year.
Data from the Institute for Supply Management showed the
pace of growth in the U.S. services sector slowed for a second
straight month in December with business activity expanding at a
lower rate and new orders contracting.
A separate report from financial information firm Markit
said its services sector purchasing managers index eased
slightly in December from the prior month, but data from the
U.S. Commerce Department showed new orders for factory goods
rebounded in November, as expected.
All eyes in the market will be on Friday's nonfarm payrolls
data, which will provide new clues on how well the U.S. economy
is recovering and how fast the Federal Reserve might unwind its
stimulus programme, which it began to taper last month, and how
long it will keep its interest rates low.
"No more than 20 percent of investors think that there is a
serious chance that the Fed will hike before the middle of
2015," Steven Englander, global head of G10 FX strategy at
Citibank, wrote in a note.
"A nonfarm payroll print of 250K or more would raise alarm
among investors that the recovery was getting out of hand and
that the Fed would be behind the curve."
He said commodity and emerging currencies would be sold off
in such a scenario, while the euro and the Swiss franc could be
a safe haven.
The euro was steady at $1.3629, taking a pause after
coming off a four-week low of $1.35715 set on Monday.
The greenback was also little changed at 104.26 yen,
having fallen 0.6 percent in the previous session after the soft
U.S. services data.
Before Friday's jobs report, investors will focus on the
minutes of the Fed's December policy meeting, due out on Jan 8,
and the European Central Bank's policy gathering on Thursday.
Among commodities, U.S. crude futures added 0.1
percent to $93.56 a barrel after having fallen 0.6 percent
overnight to a one-month low.
Gold was steady at $1,237.71 an ounce, taking a
breather after five straight days of gains and sitting not far
from a three-week high of $1,248.30 set on Monday.