* Japan shares slip before financial year-end, tax hike
* Wall St ends lower, losses led by tech sector
* European stocks supported, euro hit by speculation of ECB
By Wayne Cole
SYDNEY, March 27 Asian markets were in skittish
mood on Thursday following a late dip on Wall Street, with Tokyo
stocks slipping as investors counted down to a rise in sales tax
that is expected to swat consumer spending and test the market's
faith in Abenomics.
The Nikkei fell 1.2 percent to threaten major chart
support around 14,203, a break of which could trigger a retreat
to 14,000. The sales tax rises to 8 percent from 5 percent on
April 1, which is also the start of the new financial year in
Following its usual inverse relationship with stocks, the
yen briefly pushed to the highest in a week against the U.S.
dollar at 101.71.
Talk of possible stimulus in China had been supporting Asian
stocks in recent sessions, but the effect was starting to fade
given the lack of any concrete steps.
The Australian market shed 0.9 percent while MSCI's
broadest index of Asia-Pacific shares outside Japan
eased 0.2 percent. Stocks in South Korea, Taiwan
and Singapore all managed minor gains.
Some blamed Wall Street's slip on news the United States and
the European Union had agreed to work together to prepare
possible tougher economic sanctions in response to Russia's
behaviour in Ukraine.
The Dow ended down 0.60 percent, while the S&P 500
fell 0.70 percent. The technology-heavy Nasdaq Composite
Index lost 1.43 percent to a low not seen in six weeks.
The U.S. losses were led by technology stocks, with Facebook
off almost 7 percent a day after announcing a $2 billion
takeover of Oculus VR Inc, a maker of virtual-reality glasses
Shares in Citigroup Inc fell after hours when the
Federal Reserve rejected its plans to buy back $6.4 billion of
stock and boost its dividends, citing deficiencies in the bank's
ability to plan for stressful situations.
Others blocked by the Fed in their plans for higher
dividends or share buy backs included the U.S. units of HSBC
, RBS and Santander.
In debt markets, the talk was all about Wednesday's auction
of new U.S. five-year notes that drew such stellar
demand from investors that it left dealers with the lowest share
of an offer on record.
That drove five-year yields down a sharp 7 basis points to
1.74 percent, unwinding some of the rise seen since Federal
Reserve Chair Janet Yellen last week spooked markets with talk
of rate hikes next year.
Yields in Europe have been falling even more as policymakers
there hint at radical stimulus measures. Some of the European
Central Bank's most conservative policymakers have said the bank
could adopt more unconventional measures to tackle a surging
euro and ward off deflation.
As a result the premium that U.S. two-year notes offer over
German debt hit a 15-month high on Wednesday, making the euro
relatively less attractive against the dollar.
That saw the single currency ease to $1.3783, well
off the week's peak of $1.3875. The biggest loss came against
the Australian dollar where the euro sank 0.9 percent to a
four-month trough at A$1.4910.
The U.S. dollar was a touch softer against a basket of major
currencies at 79.999.
In precious metals trading, spot gold was subdued at
$1,304.96 an ounce after plumbing a 5-week low of $1,298.29 on
U.S. crude oil was holding at $100.18 a barrel having
gained a dollar on Wednesday as inventories at the future's
delivery point dropped for the eighth straight week.
Brent for May delivery was off 19 cents at $106.84 a
(Editing by Shri Navaratnam)