Asian shares slip

A woman waits to cross a street in front of an electronic stock indicator of a securities firm in Tokyo. AP Photo/Shizuo Kambayashi

A woman waits to cross a street in front of an electronic stock indicator of a securities firm in Tokyo. AP Photo/Shizuo Kambayashi

Published Feb 24, 2017

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Tokyo - Asian shares took a breather on

Friday, slipping from one-and-a-half-year highs as material shares were

hit by sudden falls in copper and other commodity prices while

investors assessed Washington's stance on tax and currency

policies.

US President Donald Trump called China "grand champions"

of currency manipulation, doing little to raise confidence on

trade relations between the world's two biggest economies.

Markets appeared to take his comments in stride, as they

were made just hours after his new Treasury secretary pledged a

more methodical approach to analysing Beijing's foreign exchange

practices.

"With Mnuchin officially sworn in, from now on, I suspect

most comments on foreign exchange policies come from him. And he

has said a strong dollar is in US interests," said Shuji

Shirota, head of macroeconomic strategy group in Tokyo at HSBC

Securities.

The offshore yuan stood little changed at 6.8545 per dollar

. The yuan was emerging Asia's worst performer last

year, even as Beijing tried to stem its fall, sliding around 6.6

percent in its biggest drop in over 20 years onshore.

MSCI's broadest index of Asia-Pacific shares outside Japan

was down 0.5 percent, giving back part of this

week's gains, though it is likely to log its fifth straight week

of gains.

Australian material shares were the biggest drag as they

were spooked by big falls in the price of copper, iron

ore and other commodities.

Hong Kong's Hang Seng dropped 0.5 percent while

China's mainland shares fell 0.4 percent.

Japan's yen-sensitive Nikkei was off 0.2 percent.

The MSCI world equity index, which tracks

shares in 46 nations, rose 0.15 percent to 446.69 on Thursday,

touching a record peak at 447.67 at one point and extending its

gains so far this year to almost six percent.

Leading the gains were emerging markets, which

have rallied more than 10 percent since the start of the year,

thanks to signs of a pick-up in global economic activity and a

rebound in commodity prices.

On Wall Street, the Dow managed to notch a record

high for a tenth straight session, the longest streak since

1987. The streak of gains is the longest for the index since

March 2013.

Traders have bet on tax cuts, less regulation and more

infrastructure spending from Trump and the Republican-controlled

Congress to bolster the US economy.

"There are strong expectations on tax cuts in the US markets. On the other hand, the chance of a Fed rate hike in

March seems limited, which is also helping shares," said

Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset

Management.

US Treasury Secretary Steven Mnuchin on Thursday laid out

an ambitious schedule to enact tax relief for the middle class

and businesses by August, but added the Trump administration was

still studying a border tax.

As Trump has promised a "phenomenal" plan by early March to

cut business taxes, many investors expect more clarity when he

delivers a speech to Congress on Tuesday.

Wednesday's Federal Reserve minutes, which showed that there

was less urgency among voting members to raise interest rates,

have helped to drive down US Treasury yields and the dollar.

The yield on 10-year US Treasuries hit a two-week low of

2.372 percent.

The dollar slipped to 112.55 yen, also a two-week

low, on Thursday and last stood at 112.85 yen.

The euro fetched $1.0574, off Wednesday's six-week

low of $1.0494.

Oil prices held firm near the top of their trading ranges,

thanks to high compliance among the OPEC countries to curb

output.

US crude futures traded at $54.33 per barrel, down

0.2 percent on the day.

REUTERS

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