Asian markets got off to a subdued start to the week yesterday as investors fretted about Greece’s debt crisis and largely overlooked better-than-expected Japanese economic growth in the latest quarter.
Activity in the region was muted with most markets closed for the Lunar New Year holiday.
Investors focused on European moves to tackle Greece’s sovereign debt woes, with EU finance ministers to meet yesterday and today in Brussels.
“There’s a bit of nervousness ahead of this meeting of the EU tonight where it’s expected they will come up with some further rhetoric about the Greece and Portugal situation,” IG Markets analyst Ben Potter in Sydney said.
The euro dropped to US$1.3601 in Tokyo afternoon trading from US$1.3629 in New York late on Friday, while edging up to ¥122.65 from ¥122.61.
The US dollar rose to ¥91.17 from ¥89.96.
The European currency has been hit hard by worries that other European countries such as Portugal, Ireland, Italy, and Spain could suffer fiscal problems similar to Greece.
On Friday, EU heads of state and government promised coordinated measures and offered political support to Greece but no hard cash, leaving markets unimpressed.
EU data showing that Europe’s economic recovery has stalled also spooked investors.
The heavyweight German economy ground to a halt in the fourth quarter of last year and Italy slumped back into contraction, while growth in the 16-nation bloc rose a meager 0.1 percent in the final quarter, new data showed on Friday.
Data showing Japan’s economy grew a stronger-than-expected 1.1 percent in October-December from the previous quarter failed to lift investors’ spirits, after the third-quarter performance was revised down.
Japan narrowly retained its title as the world’s No. 2 economy last year, but came close to being overtaken by fast-growing China.
Tokyo’s Nikkei-225 stock index slipped 0.78 percent, or 78.89 points, to close at 10,013.30. Shares in Toyota, hit by massive recalls worldwide, tumbled 3 percent to 3,355.
Market players wanted to see how Wall Street would digest China’s latest move to cool growth by tightening bank reserve requirements when New York markets reopen following yesterday’s Presidents’ Day holiday.
The People’s Bank of China on Friday ordered financial institutions to increase the amount of money they keep in reserve, as authorities seek to rein in rampant lending amid fears of asset bubbles.
In Sydney the benchmark S&P/ASX200 index ended down 0.36 percent, or 16.6 points, at 4,545.5.
Mining giant BHP Billiton fell 0.4 percent to A$40.66 and Rio Tinto fell 1.9 percent to 70.57.
“It’s relatively quiet and will be around Asia, as well, because it’s Chinese New Year,” CMC Markets senior dealer James Foulsham said. “The big miners are lower after a nice little run up last week, which was the best performing week for the market that we’ve seen for a while.”
Financial markets in Taiwan, China, Hong Kong, Malaysia, Singapore and South Korea were closed for the Lunar New Year holiday.
In other markets, Manila added 0.46 percent, or 13.59 points, to close at 2,963.24, while Wellington ended 0.68 percent, or 20.94 points, lower at 3,059.53.
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