Asian Shares, Dollar Under Pressure After Soft US Data

Asian Shares, Dollar Under Pressure After Soft US Data

Tokyo stocks rebounded to close higher Monday as initial geopolitical concerns that saw buying inhibited by a comparatively firm yen against the USA dollar were offset by robust Chinese economic growth data.

The United States, its allies and China are working together on a range of responses to North Korea's latest failed ballistic missile test, Trump's national security adviser said on Sunday, citing what he called an global consensus to act.

The contract fell to a near five-month low of 215.5 yen on Thursday.

The dollar index against a basket of major currencies was down 0.2 percent at 100.390 .DXY , weighed down following the release of Friday's weak U.S. retail sales and consumer prices data and as flight-to-safety drove U.S. Treasury yields to five-month lows.

North Korea tested a missile which "blew up" soon after launch, following a military parade to commemorate the birthday of Kim Il-Sung over the weekend, according to reports. "Geopolitical tensions seem to be rising all over the place", said Masahiro Ayukai, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Tokyo stocks opened lower on Monday, extending four days of losses as growing tensions on the Korean peninsula stoked demand for the safe-haven yen.

"But it could be an entirely different matter should an global emergency actually take place", he added, reckoning that the dollar could benefit due to its position as the world's principal reserve currency.

Sunny Monday and Tuesday, but rain on the horizon
Scattered showers is the outlook for Monday, according to the National Weather Service , with the likely growing overnight. The chance for thunderstorms is anticipated to last through Monday morning with a probability of 30 percent.

That dwarfed any relief for market players after the U.S. Treasury department did not name China as a currency manipulator, avoiding an all-out confrontation on currencies between the world's two largest economies.

"But this is also thought to be a part of a barter, namely the USA wants China to take tougher actions against North Korea in exchange", he said.

But the semi-annual U.S. Treasury currency report maintained the six countries on a "monitoring list" - China, Japan, Germany, South Korea, Taiwan and Switzerland. "But in the case of the Trump administration the market will need to watch out for what his trade advisors may have to say on this issue", said Yamamoto at Mizuho Securities.

Ahead of the first round of voting on April 23, the race looked tighter.

The broader Topix shed 0.3 percent to 1,455.46 and the JPX-Nikkei Index 400 declined 0.3 flawless to 13,049.04.

The risk-sensitive Aussie and kiwi fell to three- and one-month lows, respectively, in the middle of last week.

China's economy grew 6.9 per cent in the first quarter from a year earlier, a tad above economists' forecast of 6.8 per cent.

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