TOKYO Jan 9 Asian shares got off to a weak
start on Thursday after a lacklustre performance on Wall Street
overnight and ahead of Chinese inflation data, while the dollar
stood tall against a basket of currencies.
All eyes will now be on Friday's nonfarm payroll report,
which will further indicate how the U.S. economy is faring - and
therefore how fast the Federal Reserve will scale back
Economists polled by Reuters have forecast 196,000 jobs were
added to the U.S. economy in December.
The greenback gained overnight after payrolls processor ADP
said U.S. private employers added a bigger-than-expected 238,000
jobs in December, the strongest increase in 13
months, but showed muted reaction to minutes of
Federal Reserve's December meeting.
The Dec. 17-18 meeting minutes showed Fed policymakers were
keen to steer a delicate path and to make it clear that future
decisions were not set in stone, as they began reducing its
monthly bond purchases to $75 billion from $85 billion this
"While the committee was clearly attentive to the impact of
taper on financial conditions, there was also concern expressed
about compressed risk premiums if quantitative easing were to
continue for too long," analysts at BNP Paribas wrote in a note.
"Our economists think the FOMC is on track to continue
tapering in measured steps on course for ending asset purchases
by the end of this year," they said. "Against this backdrop, we
remain constructive on the USD."
The Fed's massive stimulus has been a major driver for risk
assets over the past few years.
According to CME FedWatch, short-term U.S. interest rates
futures implied traders now assign a 60 percent probability for
the first Fed rate hike as early as April 2015.
The dollar was a tad softer at 104.82 yen, having
gained 0.3 percent to 104.87 in the previous session.
Against the euro, it was steady at $1.3575, having risen as
high as $1.3554 on Wednesday.
The greenback hit a seven-week high against a basket
of major currencies.
Ahead of China's inflation data, MSCI's broadest index of
Asia-Pacific shares outside Japan slipped 0.2
percent after snapping a five-day losing streak on Wednesday.
Despite the yen weakness, stock index futures pointed to a
softer open for the Nikkei benchmark on Thursday. The
index rebounded 1.9 percent in the previous session after losing
nearly 3 percent in the first two trading days of 2014.
The other major event on Thursday was the European Central
Bank policy meeting. Analysts doubt it will do more than flag
its readiness to act when needed, despite another surprising
fall in euro zone inflation.
Among commodities, gold was little changed at
$1,225.60 per ounce, taking a pause after losing two-day in a
row and touching a one-week low on Wednesday.
U.S. crude futures added 0.2 percent to $92.56 a
barrel after tumbling 1.2 percent to a five-week low overnight
after data showed a large build in stockpiles at the U.S.
benchmark delivery point.