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Asia shares edge lower ahead of US job figures

June 5, 2014

EuroHONG KONG: Asian shares dipped today as investors brushed off another record close on Wall Street ahead of the release of closely watched US jobs data.

The euro also faced further selling pressure owing to expectations the European Central Bank will further cut interest rates and unveil other monetary easing measures to fend off deflation and support the economy.

Tokyo and Hong Kong were flat, Sydney slipped 0.51%, Shanghai eased 0.18% and Seoul was 0.56% lower.

US shares ticked up on Wednesday after broadly upbeat data. The Institute for Supply Management said activity in the services sector, accounting for 80 percent of the US economy, surged in May.

Also, the Federal Reserve’s “Beige Book” report said all 12 districts of the country saw increasing economic activity in recent weeks. That compares with April’s report, which showed two districts saw a decline in activity.

However, payrolls company ADP said the US private sector created a net 179,000 new jobs in May, its lowest level in four months.

The S&P 500 rose 0.18% to end at another record high, while the Dow edged up 0.07% and the tech-rich Nasdaq gained 0.41%.

On currency markets the euro edged lower prior to the ECB policy meeting later today when it is widely expected to cut rates to historic lows. The bank is under pressure to tackle anaemic price rises and the threat of deflation.

Official data Tuesday showed eurozone inflation slowed to 0.5% in May, from 0.7% in April and far weaker than the ECB’s target of just below 2%.

There is speculation that it could introduce a number of unconventional measures, such as lowering the deposit rate to negative levels and begin asset purchases similar to that carried out by the Fed.

The euro bought US$1.3596 against US$1.3599 in New York, while it slipped to 139.46 yen from 139.68 yen.

The dollar was quoted at 102.60 yen compared with 102.74 yen.Oil prices eased. The US benchmark, West Texas Intermediate for delivery in July, dropped 28 cents to US$102.36 a barrel while Brent North Sea crude for July was down 16 cents at US$108.24.Gold fetched US$1,243.31 an ounce at 0200 GMT compared with US$1,245.55 late Monday.



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