Asian markets headed into the weekend on a cautious note Friday, bringing an end to a volatile week, with eyes now fixed on the release of key US jobs data and the impact of deadly storm Harvey.
Traders were given another positive lead from Wall Street, where all three main indexes ended on a high after Treasury Secretary Steven Mnuchin said he expects to overhaul the tax code by the end of the year.
He said details of the plan would be released within the month, with President Donald Trump calling for a 20-point reduction in the corporate tax rate to 15 percent.
The New York tycoon's promise to slash tax, ramp up infrastructure spending and wipe out red tape was one of the key drivers of a global markets rally in the months after his November election win.
Mnuchin's comments came a day after data showing forecast-busting growth in the US economy and private-sector jobs, helping put aside Tuesday's North Korean missile launch over Japan that fanned fresh geopolitical tensions.
"After an interesting month of increased market volatility, heightened geopolitical tensions, a monstrous storm in Texas and Louisiana and rising uncertainty about the political situation in the US and around the debt ceiling, stocks closed out the month with a rally," said Greg McKenna, chief market strategist at AxiTrader.
Investors are keeping tabs on Washington, where a fractured Congress must agree to raise the country's borrowing limit to avoid a disastrous government shutdown and possible debt default.
– 'Shaky start' –
On equity markets Tokyo's Nikkei ended 0.2 percent higher, while Shanghai put on 0.2 percent, with Sydney 0.2 percent higher. But Hong Kong was 0.1 percent off and Seoul slipped 0.2 percent. Wellington and Taipei eked out small gains.
In early European trade London rose 0.2 percent, Frankfurt gained 0.4 percent and Paris jumped 0.6 percent.
OANDA senior market analyst Craig Erlam said: "The week started with a missile launch from North Korea and tropical storm in the US but attention has gradually been diverted to the fundamentals, with numerous pieces of data being released over the last couple of days.
"Risk appetite has gradually improved throughout the week following a rather shaky start, which is normal during periods of heightened geopolitical risk."
The dollar edged up but struggled to repeat Thursday's strong performance, with the euro and Japanese yen putting a dent into its initial gains.
The single currency was back around $1.19, having fallen to around $1.1850, while the greenback sat at 110.11 yen, down from its 110.50 levels Thursday.
The greenback was also down against most other currencies, with the Canadian dollar up 1.5 percent thanks to better-than-expected economic growth in Canada, while its Australian counterpart was almost one percent higher.
While Mnuchin's comments were positive for the US unit dealers took note of data showing US inflation remained tame, fuelling talk that the Federal Reserve may hold off raising interest rates for a third time this year.
Markets will get a better idea about its plans with the release of the government's non-farm payrolls figures later Friday.
Oil prices resumed their downward momentum as dealers assess the impact of Hurricane Harvey on the crude-rich Gulf Coast, with dozens of refineries out of action meaning the commodity cannot be processed.
– Key figures around 0820 GMT –
Tokyo – Nikkei 225: UP 0.2 percent at 19,691.47 (close)
Hong Kong – Hang Seng: DOWN 0.1 percent at 27,953.16 (close)
Shanghai – Composite: UP 0.2 percent at 3,367.12 (close)
London – FTSE 100: UP 0.2 percent at 7,445.14
Euro/dollar: DOWN to $1.1899 from $1.1910 at 2100 GMT on Thursday
Pound/dollar: DOWN at $1.2915 from $1.2932
Dollar/yen: UP at 110.11 yen from 109.97 yen
Oil – West Texas Intermediate: DOWN 33 cents at $46.90
Oil – Brent North Sea: DOWN 18 cents at $52.68
New York – Dow: UP 0.3 percent at 21,948.10 (close)
dan/mtp
CARREFOUR
Chinese Communist Party congress set for Oct 18: state media
China will convene its 19th Party Congress on October 18, state media said Thursday, a key meeting held every five years where President Xi Jinping is expected to receive a second term as the ruling Communist Party's top leader.
More than 2,300 delegates will discuss the country's accomplishments since the previous gathering and elect the new members of the party's top leadership, according … read more
