RTRS: Asia shares skid, dollar firm before payrolls data
By Susan Fenton
HONG KONG (Reuters) - Asian shares fell on Friday as disappointing U.S. manufacturing data raised concern that its economic recovery may not be as fast as thought, while the dollar remained firm as investors booked profits on gains in higher-yielding currencies.
European stock futures were down 0.9 percent while U.S. equity futures were 0.3 percent lower.
Investors were nervous ahead of U.S. non-farm payrolls, due at 8:30 a.m. EDT, fearing more disappointing news after an Institute for Supply Management report showed manufacturing growth was slower-than-expected in September.
Shares in Japan .N225 skidded 2.5 percent with carmakers including Toyota and Nissan hurt by a slump in September U.S. car sales.
Worries about U.S. economic data overshadowed a surprise drop in Japan's unemployment rate and helped push five-year Japanese government bonds yields to a four-year low.
U.S. 10-year bond yields fell to 3.15 percent in Asia, their lowest level since May on the back of the weak data.
Trade across Asia was quieter than usual with markets in China, India and South Korea closed for public holidays.
The MSCI index of Asia Pacific stocks traded outside Japan .MIAPJ0000PUS fell 1.6 percent, although it is still up 56 percent this year, while the Thomson Reuters index of regional shares .TRXFLDAXPU was down 1.4 percent.
"STONE COLD" RECOVERY
If U.S. non-farm payrolls data shows more than an expected 180,000 job losses, it could renew fears about the strength of the economic recovery and bolster the dollar as a safe haven, traders said.
The dollar remained firm after the disappointing manufacturing data, which prompted investors to book profits on the higher-yielding Australian dollar and the New Zealand dollar.
The euro regained some ground to $1.4539, after hitting a three-week low at $1.4502 in early Asian trade.
David Watt, senior currency strategist, at RBC Capital in Australia said the U.S. manufacturing index played to the theme that, without stimulus from governments and policymakers, "the formerly red-hot recovery is going stone cold."
Wal-Mart Stores Inc (WMT.N) said it expected a slow recovery both in the United States and Asia.
"Our business in the U.S. is very challenging right now ... some of the recent economic news is more pessimistic than expected," Wal-Mart Chairman Rob Walton told Reuters in an interview on Friday.
