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5 September 2011
Asia stocks, euro fall on U.S. growth gloom
By Alex Richardson
SINGAPORE (Reuters) – Asian stocks fell and the euro slipped to a three-week low against the dollar on Monday as fears of renewed recession in the United States and sustained worries about the euro zone debt crisis prompted investors to sell riskier assets.
U.S. jobs data on Friday showed employment growth stalled last month, while Europe faces a string of political and legal tests this week that could hurt efforts to resolve its sovereign debt crisis and increase pressure on governments to try more radical solutions.
“In this atmosphere, foreign investors are likely to remain risk-averse and inactive,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co in Tokyo.
Demand for safer assets pushed up Japanese government bonds, while the yen firmed a touch and gold lost only a little ground after spiking on Friday.
Tokyo’s Nikkei share average <.N225> fell 1.7 percent, while MSCI’s broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> fell more than 2 percent, leaving it almost 17 percent below its April high. <.T>
Stocks on Wall Street and other major exchanges closed down more than 2 percent on Friday after the U.S. Labour Department report, which also sparked a rally in safe haven investments such as gold, Treasuries and the Swiss franc.
U.S. S&P stock futures fell 0.6 percent in Asia, extending Friday’s weakness, although Wall Street is closed on Monday for the Labour Day holiday.
UNDER PRESSURE
In currency markets, the euro hit its lowest level in three weeks against the dollar while currencies sensitive to expected demand for commodities, such as the Australian dollar, also came under pressure.
“Concerns about high debt in Europe has resurfaced, and those poor payrolls results certainly got people worried about the U.S. economy and the global economy as well,” said Joseph Capurso, strategist at Commonwealth Bank in Sydney.
The euro eased to $1.4138, reaching lows not seen since August 11. It was later trading around $1.4165, down from $1.4198 late in New York on Friday. This helped drive the dollar index <.DXY> back to one-month highs.
The yen firmed slightly to around 76.76 per dollar. <FRX/>
Japanese government bond September 10-year futures rose 0.43 point to 142.72, while the benchmark 10-year yield fell 4 basis points to 1.020 percent. <JP/>
Gold held most of its gains, inching down around 0.2 percent to about $1,880 an ounce after jumping more than 3 percent on Friday. <GOL/>
U.S. crude oil eased around 0.7 percent to $85.87 a barrel.
