Asian stock markets dropped, set for the biggest weekly loss since February, and the yen rose before key US jobs data that will help shape the US interest-rate outlook.
Australia’s currency slumped and its bonds surged after the nation’s central bank lowered its inflation forecast.
Shanghai shares slid the most in two weeks, while Japan’s retreated as trading resumed following a three-day break.
The TAIEX fell 2.76 percent to 8,146.43 on Friday, from 8,377.90 on Friday last week.
A retreat in global stock markets gathered pace in the first week of the month as data highlighted the fragile state of the world economy.
The Reserve Bank of Australia joined the EU in trimming inflation projections this week, after the Bank of Japan on April 28 pushed back the target date for meeting its 2 percent goal for consumer-price gains.
Economists predict US non-farm payrolls rose by 200,000 last month, a Bloomberg survey showed before Friday’s report.
“With the US jobs report coming up, investors are holding back,” Tokyo-based Sumitomo Mitsui Asset Management Co senior strategist Masahiro Ichikawa said. “They’re watching the yen very closely.”
Four regional Fed presidents on Thursday said they were open to considering an interest-rate increase next month, something that has been almost ruled out by derivatives traders.
Fed Funds futures put the odds of a hike next month at about 10 percent, down from 20 percent a month ago.
The MSCI Asia Pacific Index dropped 0.5 percent as of 7:08am London time, set for a weekly decline of 3.3 percent.
The Shanghai Composite Index slid 1.9 percent, while Japan’s TOPIX fell 0.1 percent from Monday’s close.
Financial markets in Indonesia, South Korea and Thailand were shut for holidays.
“It’s not as bad as it could have been with Japan coming back and that’s been helped by a bit of weakening in the yen during the past couple of days,” Melbourne-based IG Ltd market analyst Angus Nicholson said.
“If we see a strong non-farm payrolls number tonight, it will help the dollar move in the right direction and help Japanese equities,” Nicholson said.
Sharp Corp plunged 8.5 percent after the Nikkei newspaper reported the struggling display-maker will post a net loss of ¥300 billion (US$2.8 billion) for the year through March.
Takata Corp tumbled 8.6 percent after the US widened its recalls of the company’s faulty airbags.
A Tokyo-listed exchange-traded fund that tracks Brazil’s benchmark shares index fell 3 percent after Fitch Ratings downgraded its assessment of the country.
Additional reporting by staff writer
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