Asia report: Markets mixed ahead of US nonfarms

Most Asian markets closed lower on Friday, as oil prices declined and investors kept their wallets in their pockets ahead of crucial US nonfarm payrolls data for June.

Japan’s Nikkei 225 lost 1.1%, having opened above 0.7%, while the yen once again gaining on the greenback.

It was last ahead 0.17% at JPY 100.60 per $1.

Internet company Yahoo Japan was up 0.67%, after Credit Suisse issued its maiden note on the stock, rating it as ‘outperform’ and expecting positive earnings from the firm’s e-commerce strategy.

Credit Suisse also initiated coverage of Rakuten with a ‘neutral’ stance, sending the company’s shares downwards by 3%.

The broker said Rakuten is in a good position for long-term growth, but has some nearer obstacles to overcome in terms of earnings growth and increasing competition in the e-commerce market.

Japan’s current account surplus for May came in at JPY 1.81trn, down 3.72% from last month.

A stronger yen helped to offset gains from overseas investors, although revenue from tourism hit record levels.

Markets on the mainland were mixed, with the Shanghai Composite losing 0.91% to 2,989.25 and the Shenzhen Composite remaining flat.

South Korea’s Kospi slipped 0.56%, while in Hong Kong the Hang Seng Index fell 0.69%.

Orient Securities debuted on the Hong Kong benchmark, opening at HKD 8.15 before slipping to HKD 8.10 in late trading.

The securities firm’s listing was the second biggest in the special administrative region after Zheshang Bank’s IPO in March.

Oil prices managed a small recovery during Asian trading, with Brent crude last up 0.75% at $46.75 per barrel and West Texas Intermediate adding 0.77% at $45.49.

Crude dropped during US hours after an Energy Information Administration report showed stockpiles in the country as falling 2.2 million barrels in the week to 1 July, far below the 6.7 million barrels reported by the American Petroleum Institute.

“Oil will be front and centre in the Asian session,” said IG market strategist Angus Nicholson.

“The real focus in the market is the lack of decline seen in gasoline inventories.

“Summer driving season in the U.S. will end within the next two months, which is when demand for gasoline is at its highest, and yet gasoline inventories are not declining as expected.”

US nonfarm payrolls for June are due out on Friday afternoon, with investors hoping that May’s unusually low headline figure of 38,000 is just a blip.

Consensus expectations were for a June reading of 175,000 on Friday morning.

In Australia, the S&P/ASX 200 finished almost flat, eking out gains of 0.05% to 5,230.54, with the materials subindex underpinning the benchmark.

New Zealand’s benchmark index managed to keep its head just above the 7,000 line, with the S&P/NZX 50 dropping 0.1% to 7,000.1.

Both of the down under dollars were ahead on the greenback, with the Aussie 0.3% stronger at AUD 1.3331 per $1, and the Kiwi ahead 0.38% at NZD 1.3872.