Asian markets fell Friday and the euro hit a near two-year low against the dollar amid Europe’s deepening debt woes, while disappointing US data and Chinese manufacturing numbers also sapped sentiment.
With investors scrambling for safer haven assets such as the yen, Japan’s finance minister pledged “decisive action” if it keeps rising, indicating a possible fresh intervention by Tokyo.
Tokyo fell 1.20 percent, or 102.48 points, to 8,440.25, Sydney dropped 0.30 percent, or 12.4 points, to 4,063.9 and Seoul eased 0.49 percent, giving up 8.96 points to close at 1,834.51.
Hong Kong slipped 0.38 percent, or 71.18 points, to 18,558.34 and Shanghai was flat, edging 1.20 points up to 2,373.44.
The weak start to June came after a miserable May in which most markets gave up almost all the gains they had made since the turn of the year as the eurozone’s debt crisis came back into sharp focus.
While Greece’s political and economic future remains uncertain, Spain’s banking sector is looking increasingly fragile, stoking fears that Madrid — already battling fiscal woes — could need an international bailout.
On Friday China said manufacturing activity grew at a much slower rate than expected in May, further confirming the world’s number two economy is slowing rapidly after recent poor figures on trade, investment and industrial output.
The official purchasing managers index (PMI) fell to 50.4 from 53.3 in April, the China Federation of Logistics and Purchasing said in a statement.
A reading above 50 indicates expansion, while a reading below 50 suggests contraction.
Later, HSBC said its PMI for May stood at 48.4 compared with 49.3 in April.
“At this rate, the government may intervene with monetary stimulus towards the end of June once inflation slows to about three percent,” Zhou Xu, an analyst with Nanjing Securities, told Dow Jones Newswires.
In the United States on Thursday the government lowered its estimate for first-quarter economic growth, to 1.9 percent from 2.2 percent, raising questions over how much of a rebound could be expected in the current quarter.
Two jobs reports — weekly unemployment claims and private-sector job creation in May — both were disappointing, indicating slow improvement in the economy.
On Wall Street the Dow fell 0.21 percent, the S&P 500 lost 0.23 percent and the Nasdaq slipped 0.35 percent. Eyes are now on key non-payroll jobs data out of Washington later in the day for a guide to the US economy’s recovery.
The gloomy data sent dealers out of risk assets, pushing the euro lower.
The single currency fell to $1.2313 in European morning trade, a 23-month low, while against the safe-haven Japanese currency it tumbled to 96.25 yen, its lowest level since late 2000. They later recovered slightly to $1.2323 and 96.32 yen.
The dollar bought 78.12 yen, from 78.33 yen in New York.
Japanese Finance Minister Jun Azumi said Friday he would take “decisive action” if the yen kept rising, with his remark interpreted as a threat of market intervention to curb the yen’s strength.
Japanese financial authorities have previously intervened in currency markets, including after the yen reached historic highs against the dollar last year. A stronger yen hurts exporters as it makes their goods more expensive overseas.
In European trade, Brent North Sea crude for July delivery tumbled $2.27 to strike $99.60 a barrel, which was the lowest level since October 4, 2011.
At the same time, New York’s main contract, West Texas Intermediate crude for July dived to $84.78 a barrel — its lowest level since October 20.
Gold was at $1,553.00 an ounce at 1100 GMT, compared with $1,566.06 late Thursday.
In other markets:
– Singapore closed down 0.97 percent, or 26.83 points, at 2,745.71.
Vehicle distributor Jardine Cycle and Carriage was down 2.07 percent at Sg$41.25 while Oversea-Chinese Banking Corp shed 1.20 percent to Sg$8.26.
– Taipei tumbled 2.68 percent, or 195.41 points, to 7,106.09.
Smartphone giant HTC shed 3.72 percent to Tw$414.0 while computer maker Acer was 1.64 percent lower at Tw$30.05.
– Manila closed 0.56 percent lower, shedding 28.79 points to 5,062.44.
DMCI Holdings fell 4.49 percent to 55.35 pesos and BDO Unibank ended 6.38 percent down at 66 pesos.
Philippine Long Distance Telephone added 3.42 percent to 2,420 pesos.
– Wellington fell 1.04 percent, or 36.29 points, to 3,452.00.
Fletcher Building slumped 4.29 percent to NZ$6.02 and Telecom was down 1.55 percent at NZ$2.54.
– Jakarta ended 0.86 percent, or 22.06 points, lower at 3,799.77.
Timah fell 1.46 percent to 1,350 rupiah, Indofood Sukses Makmur lost 1.06 percent to end at 4,675 rupiah and Indosat slid 1.28 percent to 3,850 rupiah.
– Kuala Lumpur eased 0.45 percent, shedding 7.08 points to 1,573.59.
Financial firm CIMB Group Holdings lost 1.33 percent to 7.40 ringgit, while telecoms company Axiata Group fell 0.19 percent to 5.36. UEM Land Holdings gained 1.00 percent to 2.03 ringgit.
– Bangkok tumbled 2.30 percent, or 26.31 points, to 1,115.19.
– Mumbai fell 1.56 percent, or 253.37 points, to 15,965.19.
India’s leading vehicle maker Tata Motors fell 3.73 percent to 224.5 rupees while engineering giant Larsen and Toubro fell 3.22 percent to 1,134.5.