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Asia stocks fall as US jobs data spark talk of rate hike

Asian markets mostly retreated today after a strong US jobs report increased expectations the Federal Reserve will hike interest rates soon, while Tokyo took a hit from data showing Japan’s economy grew slower than first thought in the last quarter of 2014, AFP reports. The euro struggled at 12-year lows against the dollar as the European Central Bank (ECB) prepares to kick off its bond-buying stimulus programme.  Tokyo fell 0.95 percent, or 180.45 points, to end at 18,790.55, Sydney skidded 1.31 percent, or 77.56 points, to close at 5,821.30 and Seoul shed 1.00 percent, or 20.12 points, to 1,992.82.

In the afternoon Hong Kong was 0.47 percent lower but Shanghai edged up 0.10 percent, reversing earlier losses. Regional investors followed their US peers, who ran for the exit Friday after the Labor Department said 295,000 jobs were created in February, pushing the unemployment rate down to 5.5 percent, the lowest level since May 2008. Analysts said the latest strong jobs report — which also follows a slew of other positive indicators — increased the likelihood the Fed will lift rates from near-zero as early as the summer. The Dow tumbled 1.54 percent and the S&P 500 fell 1.42 percent, while the Nasdaq lost 1.11 percent.

“The market’s response to the much-awaited US payrolls report was abrupt,” Kymberly Martin, a markets strategist in Wellington at Bank of New Zealand, said in a note to clients. “This will provide sufficient ammunition for the Fed to remove patience from their statement at the next meeting and undertake an initial rate hike in June.”

— Euro struggles —

While US stocks retreated, the dollar picked up against the yen. In afternoon trade Monday it was at 121.05 yen, compared with 120.78 yen in New York and well up from the 120.01 yen seen in Tokyo earlier Friday.  Also, the euro bought $1.0843 compared with $1.0842 in New York.  However, the single currency was at 131.16 yen against 130.95 yen.  The euro, already under pressure because of a stuttering eurozone economy and worries over Greece’s future, is expected by some experts to reach parity with the dollar by next year as the ECB rolls out its bond-buying programme.  The $1.2 trillion quantitative easing scheme, which starts Monday, is the long-awaited “bazooka” designed to help kickstart the eurozone and fight off deflation.

The US jobs figures also sent the dollar rallying against emerging economy currencies as dealers move their cash back in search of safer and healthier returns.  The greenback at one point touched 13,077 Indonesian rupiah at one point, its highest since 1998, while India’s rupee touched a two-month low of 62.73 to the dollar.  China said Sunday that exports surged a better-than-forecast 48.3 percent in February — partly because of the effects of the Lunar New Year holiday — but imports slumped a crippling 20.5 percent.  “The Chinese New Year is a major distortion for trade data,” said Xie Zhaowei, a Shanghai-based analyst at Huatai Great Wall Futures.

“Demand remained subdued inside China even if you strip out the impact of the week-long holiday as the economy is slowing.”  Oil prices fell. US benchmark West Texas Intermediate dipped 11 cents to $49.50 a barrel while Brent shed 33 cents to $59.40 in afternoon trade. Gold fetched $1,171.32 against $1,197.11 late Friday.

In other markets:

— Taipei gave up 0.86 percent, or 82.79 points, to 9,562.98. Taiwan Semiconductor Manufacturing Co shed 2.35 percent to Tw$145.5 while Hon Hai Precision Industry was 1.13 percent lower at Tw$87.8.  — Wellington fell 0.10 percent, or 6.11 points, to 5,896.96. Mighty River Power slipped 1.16 percent to NZ$3.40 and Air New Zealand was down 0.17 percent at NZ$2.95.

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