* MSCI Asia ex-Japan slips 1 pct, Nikkei slides 1.6 pct
* Euro hits record lows vs Aussie, kiwi and near 1-week low
vs USD
* Draghi disappoints, but also offers blueprints for future
action
* US jobs data due at 1230 GMT
By Chikako Mogi
TOKYO, Aug 3 (Reuters) – Asian shares and the euro fell on
Friday as investors shunned risk after the European Central Bank
took no immediate action and only hinted at future steps to
tackle the euro zone’s fiscal woes, following similar inaction
from the U.S. Federal Reserve.
Investors also have reasons to be more cautious ahead of a
key U.S. non-farm payrolls data for July due at 1230 GMT, with
job creation below the 100,000 forecast likely to boost hopes
the Fed, which on Wednesday stood pat with its current monetary
policy, would embark on further easing as early as next month.
MSCI’s broadest index of Asia-Pacific shares outside Japan
slipped 1 percent after global stocks tumbled on
Thursday, but was set for a weekly gain of about 1 percent.
The index’s materials sector slumped nearly
2 percent as miners dragged Australian shares lower to
rank among the worst performers in Asia with a 1 percent drop.
“One would expect the risk-off adjustment would likely be
involved in the selling of stocks such as miners, whose revenue
strengths are more vulnerable to on-going problems in Europe,
and the retrenchment of world confidence and so forth,” said Ric
Spooner, market strategist at CMC Markets, of Australian stocks.
Japan’s Nikkei stock average slid 1.6 percent, hit
by heavy quarterly losses and cuts to the full-year earnings
outlook from Sharp Corp and Sony Corp.
Expectations for bold actions had run high after ECB
President Mario Draghi on Thursday last week vowed to do
whatever it takes to preserve the euro.
The ECB, after keeping interest rates steady, indicated it
may resume buying government bonds to drive down surging Spanish
and Italian borrowing costs, but passed the baton back to euro
zone governments by saying they must act first.
But Draghi said the ECB would consider other “non-standard”
measures, hinting at quantitative easing, and by noting signs of
an economic recession spreading across the continent left the
door open for future rate cuts.
“It was obviously disappointing not to get outright buying
of bonds by the Fed and ECB, but it seems they will come and in
the case of the ECB, could be unlimited,” said Chris Weston, a
dealer at IG Markets in Melbourne.
CENTRAL BANKS NOT ALMIGHTY
The euro hit all-time lows against the Australian and New
Zealand dollars in early Asian trade around A$1.1600
and NZ$1.4980 respectively.
The single currency fell 0.1 percent against the U.S. dollar
to $1.2170, not far from a one-week low of $1.21335
touched after investors digested the ECB’s news on Thursday.
“Draghi kept hopes that the ECB will do what it can within
the framework of a central bank and that is positive,” said
Kazuto Uchida, an executive officer and general manager of the
global markets division at the Bank of Tokyo-Mitsubishi UFJ.
“But concurrently, markets were reminded of the limit to
what the central bank can do for Europe’s fiscal crisis. There
is now risk of repercussions to having an excessive belief that
monetary policy or central banks are ‘almighty’.”
Uchida said that the Fed, in contrast, has managed market
expectations better to keep relative stability by pricing in
further easing stimulus.
While European shares fell on Thursday, euro zone bank
shares and Spanish stocks were still up following Draghi’s
pledge last week, while Europe’s volatility index fell 6
percent on Thursday, signalling investors are still willing to
take risk.
Risk aversion may also be tamed somewhat as data on Thursday
showed the number of Americans filing new claims for jobless
benefits rose last week and manufacturers suffered an unexpected
drop in orders in June, suggesting the economy is struggling to
break out of a soft patch and needs more monetary stimulus.
The Fed said at this week’s meeting that it is prepared to
act if the economy deteriorates further, and economists say the
U.S. central bank is buying time to lay the groundwork for
further monetary easing, possibly at its Sept. 12-13 gathering.
Brent crude added 0.4 percent at $106.30 a barrel
while U.S. crude futures rose 0.4 percent to $87.50.
Data on Friday showed activity in China’s services industry
slowed in July from June, but still fared far better than the
factory sector, with the official purchasing managers’ index
falling to 55.6 from 56.7 and staying above a 50 reading which
signals expansion.
Market jitters unsettled Asian credit markets, sending the
spread on the iTraxx Asia ex-Japan investment-grade index
wider by 4 basis points.
