Asian markets pull back ahead of U.S. jobs report

Asian markets pull back ahead of U.S. jobs report

Stocks tick lower in Tokyo, Seoul; Hang Seng closed

Asian shares were mostly lower on Thursday as investors awaited a much watched U.S. jobs for indications of how the recovery from the pandemic is faring.

Japan’s benchmark Nikkei 225 NIK, -0.29% slipped 0.5% in early trading, while South Korea’s Kospi 180721, -0.44% lost 0.5%. Australia’s S&P/ASX 200 XJO, -0.65% shed 0.4%. The Shanghai Composite SHCOMP, -0.07% dipped 0.1%. Trading was closed in Hong Kong for the anniversary of the handover of the former British colony to Beijing. Stocks declined in Taiwan Y9999, -0.23% and Singapore STI, -0.20% but gained in Indonesia JAKIDX, +0.34%.

The Bank of Japan’s quarterly “tankan” survey showed continuous recovery, with large manufacturers’ sentiment remaining largely positive despite the pandemic.

The headline survey showed a rise to 14 from 5 in the previous quarter, but that was lower than expected, according to Robert Carnell, regional head of research Asia-Pacific at ING.

The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.

Carnell and others said the tankan findings show the big jump in recovery for the world’s third largest economy may already be over, meaning that from now, the rebound will be steady but gradual.

“Risks factors such as the more contagious delta strain of COVID-19 and U.S. payrolls report will continue to be on watch,” said Yeap Jun Rong, market strategist at IG in Singapore.

“Although there has been optimism on the vaccine front to curb the delta variant, the vaccination progress in the region will have to see some significant pick-up to deal with the spreads,” Yeap said.

Worries remain as Asia has lagged the U.S. and parts of Europe in vaccinations and some countries are enduring their worst outbreaks yet.

On Wall Street, the S&P 500 edged up 0.1%, bringing its advance over the past three months to 8.2% and 14.4% for the first half of the year.

Stocks have been pushing higher on optimism that the economy is strengthening and that the Federal Reserve will keep interest rates low for a while longer.

“The Fed has sort of kept the proverbial spigot open, if you will, with liquidity, so there’s still a pretty sizable amount of capital out there looking for a place to go,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab.

Investors are wait for the government’s monthly jobs report due out Friday.

The S&P 500 index SPX, +0.13% rose 5.70 points to 4,297.50. The Dow Jones Industrial Average DJIA, +0.61% added 0.6% to 34,502.51. The Nasdaq composite COMP, -0.17% fell 0.2% to 14,503.95. The tech-heavy index hit record highs on Monday and Tuesday.

In energy trading, benchmark U.S. crude CLQ21, 2.31% rose 23 cents to $73.70 a barrel in electronic trading on the New York Mercantile Exchange. It gained 49 cents to $73.47 on Wednesday. Brent crude BRNQ21, the international standard, gained 19 cents to $74.81 a barrel.

In currency trading, the U.S. dollar USDJPY, 0.26% inched down to 111.09 Japanese yen from 111.11 yen.

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