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GLOBAL MARKETS-Asia shares worn out by trade tension, yen a safe harbour

Published 2018-09-07, 02:42 a/m
© Reuters.  GLOBAL MARKETS-Asia shares worn out by trade tension, yen a safe harbour
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(Adds spreadbetters in para 2, updates prices throughout)

* Asian stock markets : https://tmsnrt.rs/2C2BSt0

* Asia shares ex-Japan lowest since July last year

* Tech sector hit by drop in chip stocks, social media

* Fears new U.S. tariffs on China could come at any time

* Yen and Swiss franc in favour as safe harbours

By Wayne Cole

SYDNEY, Sept 7 (Reuters) - Asian shares carved out a 14-month trough on Friday as investors feared a new salvo of Sino-U.S. tariffs could come at any moment, while a slump in U.S. chip stocks rippled through the tech-heavy region.

Spreadbetters pointed to a firm start for European markets with futures for Eurostoxx 50 STXEc1 , Germany's Dax FDXc1 and London's FTSE FFIc1 reversing early losses to be last up 0.1-0.3 percent. EMini futures for the S&P ESc1 were a tad higher too.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 0.3 percent, having earlier reached its lowest since mid-July last year.

The Nikkei .N225 shed 0.8 percent, undermined by a rising yen and reports U.S. President Donald Trump could be contemplating taking on Japan over trade.

Chinese blue chips .CSI300 managed a 0.5 percent bounce as beaten-down health care stocks found buyers after taking a savaging in recent months amid vaccine scandals.

Emerging markets in the region were struggling to steady after a punishing week, with Indonesia and the Philippines still badly scarred by fears of capital flight following crises in Argentina and Turkey.

Nerves were set to be frayed further as the public comment period for proposed tariffs on an additional $200 billion worth of Chinese imports ended at 0400 GMT. The tariffs could now go into effect at any moment, though there was no clear timetable.

China has warned of retaliation if Washington launches any new measures. seems unlikely the tariffs are not implemented as the U.S. administration believes that they are winning the trade war and will be in a stronger position to negotiate if they put more pressure on China," JPMorgan (NYSE:JPM) analysts wrote in a note.

"The tech sector was also very weak overnight, with a slide in Micron of almost 10 percent and further weakness in the Chinese Internet ADRs."

WATCHING WAGES

Eyes were now turned to the U.S. payrolls report for August which is expected to show a robust rise of 191,000, in part as July was temporarily depressed by the closure of the Toys R Us chain that month.

Still, analysts at NatWest Markets cautioned that: "Despite employment indicators pointing to another strong report, it is worth noting that there is a tendency for August payrolls to initially disappoint and then be revised up noticeably later."

Just as important will be figures on U.S. wages where a rise above the 0.2 percent forecasted would likely boost the dollar and pressure Treasury prices.

The dollar could do with the lift, having lost out to the safe-haven yen and Swiss franc. It was changing hands at 110.62 yen JPY= after falling 0.7 percent on Thursday, the sharpest one-day loss in seven weeks.

Part of the decline came after a Wall Street Journal columnist reported Trump had mused about starting a trade fight with Japan.

The dollar also hit a four-month low on the franc around $0.9645 CHF= . Against a basket of currencies, the dollar index .DXY nudged lower to 94.939 and off the week's top of 95.737.

The euro was a shade higher at $1.1636 EUR= , while sterling idled at $1.2939 GBP= amid ongoing uncertainty over Brexit negotiations.

In commodity markets, the dip in the dollar left gold a sliver higher at $1,200.67 an ounce XAU= .

Crude oil was slighty higher after falling more than 1 percent on Thursday when U.S. data showed gasoline inventories rose unexpectedly last week. O/R

Brent was 4 cents higher at $76.54 a barrel LCc1 , while U.S. crude edged up 13 cents to $67.90 CLc1 .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ MSCI and Nikkei chart

http://reut.rs/2sSBRiD Asian stock markets :

https://tmsnrt.rs/2C2BSt0 Global assets' performance

https://tmsnrt.rs/2BX92de World FX rates in 2018

http://tmsnrt.rs/2egbfVh

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Richard Borsuk & Shri Navaratnam)

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