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.