Asian markets headed into the weekend on a cautious note on Friday, bringing an end to a volatile week, with eyes now fixed on the release of key US jobs data and the impact of deadly storm Harvey.
Traders were given another positive lead from Wall Street, where all three main indexes ended on a high after Treasury Secretary Steven Mnuchin said he expects to overhaul the tax code by the end of the year, reports BSS.
He said details of the plan would be released within the month, with President Donald Trump calling for a 20-point reduction in the corporate tax rate to 15 percent.
His promise to slash tax, ramp up infrastructure spending and wipe out the red tape was one of the key drivers of a global markets rally in the months after Trump’s November election win.
Mnuchin’s comments came a day after data showing forecast-busting growth in the US economy and private-sector jobs, helping put aside Tuesday’s North Korean missile launch over Japan that fanned fresh geopolitical tensions.
“After an interesting month of increased market volatility, heightened geopolitical tensions, a monstrous storm in Texas and Louisiana and rising uncertainty about the political situation in the US and around the debt ceiling, stocks closed out the month with a rally,” said Greg McKenna, chief market strategist at AxiTrader.
Investors are keeping tabs on Washington, where a fractured Congress must agree to raise the country’s borrowing limit to avoid a disastrous government shutdown and possible debt default. – Dollar struggles – On equity markets, Tokyo’s Nikkei ended the morning 0.2 percent higher, while Hong Kong added 0.3 percent and Shanghai put on 0.4 percent, with Sydney 0.1 percent higher. But Seoul slipped 0.2 percent and Wellington gave up 0.1 percent. The dollar struggled to maintain on Thursday’s strong performance, with the euro and Japanese yen putting a dent into its initial gains.
The single currency was back above $1.19, having fallen to around $1.1850, while the greenback sat around 110 yen, down from its 110.50 levels Thursday.
The greenback was also down against most other currencies, with the Canadian dollar up 1.5 percent thanks to better-than-expected economic growth in Canada, while its Australian counterpart was almost one percent higher.
While Mnuchin’s comments were positive for the US unit dealers took note of data showing US inflation remained tame, fuelling talk that the Federal Reserve may hold off raising interest rates for the third time this year.
Markets will get a better idea about its plans with the release of the government’s non-farm payrolls figures later Friday.
Oil prices resumed their downward momentum as dealers assess the impact of Hurricane Harvey on the crude-rich Gulf Coast, with dozens of refineries out of action meaning the commodity cannot be processed.
