Tokyo - Asian shares rose on Friday after U.S. data showed broad U.S. economic strength, while the yen rebounded from overnight multi-year lows after Japan's finance minister warned that its recent weakening had been “too rapid”.
Spreadbetters expected a subdued start to European trade, with Britain's FTSE 100 seen opening 3 to 6 points higher, or as much as 0.1 percent; Germany's DAX was expected to open 6 to 12 points higher, also up as much as 0.1 percent; and France's CAC 40 was predicted to open between 2 points lower and 8 points higher.
“European equities are set to open flat,” Capital Spreads dealer Jonathan Sudaria said in a note. “Despite U.S. markets' continuing to plough ever higher, that optimism is being offset by European traders instead focusing on weak domestic factors.”
MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.3 percent, though on track for a weekly loss of over 1 percent.
It was underpinned by record finishes by the Dow Jones industrial average and S&P 500 after a spate of upbeat U.S. data contrasted with signs of spreading weakness in China and Europe.
Initial U.S. weekly jobless claims fell, factory activity in the U.S. mid-Atlantic region grew at its fastest pace in two decades and existing home sales strengthened.
Hong Kong and mainland Chinese shares rebounded on Friday as prolonged profit-taking pressure finally eased in the first week of a landmark link between the Hong Kong and Shanghai exchanges.
“Investors are back to being reasonable,” said Shih Wenbien, stock strategist at Yunta Securities in Shanghai.
Monday's launch of the “stock connect” had been expected to boost share values and volumes on both bourses, but many investors took advantage of the sharp run-up in prices ahead of the debut to take profits instead.
SNAP ELECTION LIFTS NIKKEI
Japan's Nikkei stock average erased earlier losses and ended up 0.3 percent, after Prime Minister Shinzo Abe dissolved parliament's lower house on Friday for a snap election on Dec. 14. It marked its first weekly drop in five weeks, shedding 0.8 percent.
Earlier in the session, Japanese Finance Minister Taro Aso warned that its recent weakening was “too rapid.”
Aso stuck to Japan's stance of allowing the market to determine exchange rates and dismissed the need to intervene to halt the slide, but his comments sent the dollar down to a session low of 117.35 yen, well below its seven-year peak of 118.98 hit on the EBS trading platform on Thursday. It last stood at 117.80, down about 0.3 percent on the day.
The euro dropped to a low of 147.49 after it had soared to a six-year high of 149.12 yen in the previous session. It last stood at 147.84, down about 0.3 percent.
The dollar has gained more than 7 percent since the yen skidded in the wake of the Bank of Japan's surprise move on Oct. 31 to ease policy further. Its decline accelerated this week after data showed an unexpected contraction in the third quarter, putting Japan's economy back into recession.
The euro edged up about 0.1 percent against the greenback to $1.2547.
On Thursday, purchasing managers' surveys from the euro zone showed business growth was weaker than forecasters had predicted, adding to expectations that monetary policy will need to be eased further.
Later on Friday, European Central Bank chief Mario Draghi and Bundesbank head Jens Weidmann are due to speak at the European Banking Congress in Frankfurt.
In commodities markets, U.S. crude extended gains from Thursday, adding about 0.6 percent to $76.33 a barrel. Brent rose about 0.5 percent to $79.69, on track to snap an eight-week slide.
Investors awaited the Organization of the Petroleum Exporting Countries meeting next week, as expectations rose that OPEC might agree on reducing production.
Spot gold was slightly lower on the day at $1,193.40 an ounce, but still on track for its third straight weekly gain.
Reuters