Asia slips as weak results halt record Wall St run, yen holds gains

Asian stocks dipped on Friday after weak corporate results halted Wall Street's record run overnight, while the yen held to large gains made after the Bank of Japan governor downplayed the need for “helicopter money” stimulus.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.4 per cent. It remained close to its nine-month high seen on Thursday, and is headed for a fractional 0.1 per cent gain on the week.

China's CSI 300 index and the Shanghai Composite both slipped 0.4 per cent. The former is poised for a loss of 1 per cent for the week, and the latter 0.9 per cent.

New Zealand shares continued their record-setting trend, climbing 0.3 per cent to hit a fresh all-time high on Thursday. They're headed for a 2.3 per cent gain for the week.

Shares in Taiwan, Indonesia and Thailand all closed at their highest levels in at least a year on Thursday. Australia ended at the highest point since Aug. 6, 2015, and Hong Kong set a 2016 high. All were trading lower on Friday, except Thailand, which opened flat, but all were set to end the week higher.

Japan's Nikkei slid 0.9 per cent, dragged down by the yen's 1 per cent rally on Thursday. The index is still up 1 per cent in a week during which it touched an eight-week high thanks to an initially weaker yen and hopes of fiscal and monetary stimulus.

In a BBC interview, recorded mid-June but broadcast on Thursday, BOJ Governor Haruhiko Kuroda ruled out the idea of using “helicopter money” - directly underwriting the budget deficit - to combat deflation.

“Pretty much everything is on the table when it comes to the next BOJ monetary policy decision on 29 July. Everything, that is, except for outright helicopter money,” Frederic Neumann, co-head of Asian economic research at HSBC in Hong Kong, wrote in a note on Friday. “The case for more easing is evident, and markets are expecting swift and determined action.”

Japan is likely to miss its deficit-cutting target in 2018 because the government has delayed a sales tax hike by more than two years, public broadcaster NHK said on Friday, citing an unidentified source.

The dollar was little changed at 105.83 yen after coming off its peak of 107.49, its highest in six weeks, the previous day.

The dollar index was also flat at 96.947, compared with its four-month peak of 97.323 scaled on Wednesday.

The euro was steady at $1.1020. The common currency had briefly risen to $1.1060 on Thursday after European Central Bank President Mario Draghi noted that growth and inflation were moving along the path projected in June.

As widely anticipated, the ECB stood pat on monetary policy on Thursday. But, despite Draghi's statement that more evidence was needed before any decision, the bank kept the door open to more policy stimulus, citing “great” uncertainty and risks to the region's economic outlook.

The Dow Jones Industrial Average on Thursday snapped a nine-day winning streak, during which it hit consecutive record highs, because of disappointing results from Intel and key transportation companies.

In commodities, crude futures advanced after big falls overnight on data pointing to record U.S. stockpiles of gasoline and other oil products, when Iraqi crude exports are on the rise, heightening supply glut concerns.

Brent crude advanced 0.3 per cent to $46.34 a barrel after tumbling about two per cent on Thursday. It is headed for a 2.7 per cent drop for the week.

US crude rose 0.2 per cent to $44.82 a barrel, poised for a 2.5 per cent fall in a week in which they touched a two-month low.

The pull back in stocks and dollar gave gold a boost. Spot gold jumped 1.2 per cent overnight, but inched down 0.2 per cent to $1,328.22 an ounce. Thursday's gains helped shrink losses for the week to 0.8 per cent.

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