Asian markets down as dollar sits near 15-year lows

Agence France-Presse

Posted at Oct 07 2010 03:16 PM | Updated as of Oct 07 2010 11:16 PM

HONG KONG - The dollar hit a new 15-year low against the yen in Asia on Thursday while most stocks slipped as dealers remained cautious ahead of the release of key US jobs data later in the week.

Expectations the US Federal Reserve will announce new pump-priming measures to boost the economy weighed on the greenback, which hit 82.62 yen in Tokyo trade.

The dollar was below the 82.86 level at which Tokyo stepped into the currency markets for the first time in six years on September 15.

The euro was trading at 1.3921, hardly changed from New York late Wednesday. It slipped to 115.35 yen from 115.58.

"The basic trend is dollar selling on the expected credit easing... The market is now sensitive to any negative news on the US economy," said Yasuyuki Takeuchi, dealer at Mitsubishi UFJ Trust and Banking.

The dollar, which has been under pressure due to concerns over the world's biggest economy, got some respite this week when Japan reduced its interest rates to between zero and 0.1% from 0.1%.

But it fell back against the yen on expectations of monetary easing from Washington, which were heightened after data Wednesday showed an unexpected drop in private sector jobs in September.

The dollar resisted further falls from the low hit in New York on speculation of further Japanese intervention, but some players believe Tokyo cannot move before a Group of Seven (G7) meeting starting Friday, dealers said.

Tokyo's Nikkei stock index closed down 0.07%, or 6.62 points, at 9,684.81 and Seoul fell 0.16%, or 3.10 points, to finish at 1,900.85.

Hong Kong slipped 0.18% by the break.

But Sydney edged up 0.10%, or 4.5 points, to end at 4,691.3.

Chinese markets were closed for a public holiday.

"Global equities markets are drifting as they look for a lead from the US Federal Reserve," Macquarie Private Wealth associate director Martin Lakos told Dow Jones Newswires.

He said dealers would now hold back until they see the US non-farm payroll data on Friday, which will give an indication to the state of the world's biggest economy.

Sydney's gains came after the government released data showing 49,500 jobs were created in September, well up from the 20,000 forecast, while the unemployment rate was unchanged at 5.1%.

On oil markets New York's main contract, light sweet crude for November delivery, was up 6 cents to $83.29 a barrel and Brent North Sea crude for November gained 12 cents to $85.15.

Gold opened at $1,346.00-$1,347.00 an ounce in Hong Kong, down from Wednesday's close of $1,348.50-$1,349.50.