* MSCI Asia ex-Japan drops as tech-heavy Seoul shares dip
* Nikkei surges as the yen hits fresh lows vs dollar and euro
* Samsung Electronics posts record profit, cautious on capex plans
* Positive economic outlook supports copper, limits oil loss
By Chikako Mogi
TOKYO, Jan 25 (Reuters) - Asian shares fell on Friday, hurt by a drop in regional technology stocks and on caution ahead of the corporate earnings season, but gains in Japan and Australia limited overall losses for equities.
Upbeat manufacturing reports from the United States, Germany and China underpinned sentiment for other assets, supporting copper while curbing selling pressure in oil.
“The PMI indicators from the U.S., Europe and China should serve to keep markets tracking higher,” said CMC Markets senior trader Tim Waterer in Sydney.
The MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.5 percent, and was set for a weekly drop of 1 percent, its biggest such loss in two months.
A 1.4 percent slide in the technology sector dragged the pan-Asian index down, as tech-heavy markets such as South Korea and Taiwan fell.
Seoul shares declined 0.9 percent, weighed by weak profits for automakers, while tech shares continued to falter as Samsung Electronics announced cautious spending plans for the first time since the global financial crisis.
Shares of Apple Inc’s suppliers extended their declines after Apple’s below-estimate results announced earlier in the week: Taiwan’s Largan Precision weakened and Samsung shares shed as much as 3.3 percent.
Hong Kong and Shanghai were the other laggards as investors took profits from recent rallies and remained cautious ahead of the upcoming earnings season.
A 0.3 percent rise in London copper to $8,118 a tonne and gold prices steadying around $1,669 an ounce helped push commodity-reliant Australian shares up 0.5 percent to a fresh 21-month high, marking an eighth straight session of gains.
U.S. crude eased 0.1 percent to $95.87 a barrel and Brent inched down 0.2 percent to $113.11.
“It now seems that the stronger tone in global equity markets, coupled with a notable easing in European and US market tensions, is leading to short-term pressure on gold,” said Ed Meir, an analyst at INTL FCStone, in a research note.
European markets are seen falling, with financial spread-betters predicting London’s FTSE 100, Paris’s CAC-40 and Frankfurt’s DAX would open down as much as 0.4 percent. U.S. stock futures were down 0.2 percent, pointing to a softer Wall Street start.
Japan’s Nikkei stock average outperformed its Asian peers with a 2.9 percent surge as the yen hit fresh lows versus the dollar and the euro on expectations Japan will continue to pursue bold policies to beat deflation and stimulate growth. The Nikkei rose for an 11th straight week.
“Trading on Japan is gaining momentum among foreign investors, centering around the dollar/yen, which has dictated Nikkei’s direction,” said Tetsuro Ii, the chief executive of Commons Asset Management.
The yen’s slide bolsters sentiment for Japanese equities as it lifts earnings prospects for exporters, ahead of the quarterly earnings season set to start next week.
The dollar scaled its highest level since June 2010 to reach 90.695 yen early on Friday and the euro rose to 121.32, its highest since April 2011. Prime Minister Shinzo Abe’s new administration has made clear it wants a weaker yen, providing investors a reason to short the currency.
More than 80 percent of Japanese firms are in favour of Abe’s drive for aggressive monetary easing and huge fiscal spending, though most also feared Japan would face a debt crisis within a few years, according to a Reuters poll.
The yen’s two-month decline has more legs, many traders and analysts believe, noting the yen has barely caught up to levels before a potential debt default by Greece sparked the euro zone debt crisis and sent the euro plummeting nearly three years ago.
The yen was around 95 yen against the dollar and 123 yen against the euro early in May 2010 when protests flared up in Greece against its austerity steps in exchange for a bailout.
Despite the recent rallies, the Nikkei remains well below levels before the 2008 financial crisis while the Standard & Poor’s 500 Index and Germany’s benchmark stock index have both already exceeded that level, thanks to the weakness of the euro and the dollar, measured against a basket of currencies.
“JPY weakness should continue over the coming year driven by an expansion of the Bank of Japan’s balance sheet relative to the European Central Bank and the Federal Reserve,” said Kit Juckes, FX strategist at Societe Generale in a note. “I don’t know how long the USD/JPY is going to pause at around 90, but a move to 100 still seems very likely in the longer run.”