Asia report: Markets finish mixed as US data disappoints

Markets in Asia finished in a mixed state on Thursday, as investors digested some disappointing data from the US, raising the prospect that the Federal Reserve could cut interest rates at its July policy meeting.

In Japan, the Nikkei 225 was up 0.3% at 21,702.45, as the yen strengthened 0.03% against the dollar to last trade at JPY 107.78.

Of the major components on the benchmark index, automation specialist Fanuc rose 0.1% and technology conglomerate SoftBank Group surged 3.44%, while fashion firm Fast Retailing fell 1.78%.

The broader Topix index was 0.65% higher in Tokyo, closing out its session at 1,589.78.

On the mainland, the Shanghai Composite lost 0.33% to close at 3,005.25, and the smaller, technology-heavy Shenzhen Composite lost 0.55% to 1,591.24.

South Korea’s Kospi was 0.61% firmer at 2,108.73, while the Hang Seng Index in Hong Kong slipped 0.21% to settle at 28,795.77.

Both of the blue-chip technology stocks were in the green in Seoul, with Samsung Electronics up 1.32% and chipmaker SK Hynix rising 1.59%.

Sentiment began weaker as the region woke up, after disappointing private payrolls data from the US showed the figure increased less than anticipated for June.

That lead to increased expectations among traders that the Federal Reserve could cut interest rates at its meeting this month.

Last month, the central bank did pave the way towards easing, as it said it would “act as appropriate” to ensure America’s current economic expansion continued.

Meanwhile, the US trade deficit rose to $55.5bn in May, compared to the $54bn expected, and the previous month’s figure was revised up to $51.2bn from $50.8bn.

Economists were closely looking at the US deficit to China amid the two countries’ ongoing trade war, which jumped to $30.1bn from $26.9bn.

London Capital Group senior market analyst Ipek Ozkardeskaya said the devaluation of the renminbi had played a role in favour of China, adding that the latest trade figures would likely not help in releasing the White House’s anger as the trade talks resume.

“The US and Chinese officials will be talking on the phone next week, according to the latest news, but the chances for a significant progress are low.

“Hence, the trade war story should continue being one of the major talking points in the second half of the year.”

Oil prices were lower as the region went to bed, with Brent crude last down 0.13% at $63.74 per barrel, and West Texas Intermediate falling 0.53% to $57.04.

In Australia, the S&P/ASX 200 was 0.49% higher to end its trading day at 6,718.00, while across the Tasman Sea, New Zealand’s S&P/NZX 50 eked out gains of 0.1% to close at 10,558.28.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.13% at AUD 1.4243, and the Kiwi retreating 0.32% to NZD 1.4961.