SINGAPORE- Asian stock markets made a subdued start to the second half of 2021 on Thursday, weighed by worries about new coronavirus infections and fresh lockdowns, while bond and currency markets were on edge ahead of US labor data.
Japan’s Nikkei was 0.3 percent lower while MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2 percent in thin trade as Hong Kong markets were shut for a holiday.
The US dollar hit a 15-month high against the Japanese yen and Treasury yields held steady.
“The virus is still playing a role … although it’s difficult to see much direction in anything at the moment,” ING economist Rob Carnell said on the phone from Singapore.
“There’s a broad sense that the dollar isn’t such a bad unit to be holding,” he said, as traders turned to US jobs data due Friday for the next clue on the Federal Reserve’s rates outlook.
“Everyone is a little bit jittery … and there’s so much money around that virtually every bet is covered,” he said.
“The market is completely divided – I think that’s why things are pretty rangey,” he added.
US private payrolls beat expectations overnight, although they are an unreliable guide to the broader labor-market data due out on Friday, which economists forecast will show 700,000 jobs were added in June.
Data in Asia on Thursday painted a mixed picture, with Japanese manufacturers’ mood at a two-and-a-half year high, but factory activity growth there slowing down in the face of difficulty sourcing computer chips.
Slower vaccination rates in Asia and the extension of restrictions to curb the spread of the virus as the delta variant spreads – as well as a regulatory crackdown on Chinese tech giants – have had regional markets lagging this year. – Reuters
