1. Global Markets: Asia stocks, dollar subdued on last trading day of 2016, euro spikes briefly

Global Markets: Asia stocks, dollar subdued on last trading day of 2016, euro spikes briefly

Asian stocks and the dollar were off to a subdued start on Friday as investors took profits on the last trading day of 2016, while the euro briefly spiked in thin trade.

By: | Singapore | Published: December 30, 2016 8:38 AM
Japan's Nikkei retreated 0.7 percent on a stronger yen, on track for a 0.1 percent loss in 2016. That is its worst in five years, with the yen's 22 percent surge in the first half of the year slamming the index. (Reuters) Japan’s Nikkei retreated 0.7 percent on a stronger yen, on track for a 0.1 percent loss in 2016. That is its worst in five years, with the yen’s 22 percent surge in the first half of the year slamming the index. (Reuters)

Asian stocks and the dollar were off to a subdued start on Friday as investors took profits on the last trading day of 2016, while the euro briefly spiked in thin trade.

The euro jumped as much as 2 percent early on Friday, its biggest intraday gain since Nov. 8, before settling back down to trade 0.6 percent higher at $1.0559.

“It’s a really thin market today, and suddenly, offers disappeared and short-term players pushed the euro higher and took out stops. That’s all,” said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

The common currency is still down 2.8 percent for the year.

MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed early on Friday.

In a year marked by major political surprises, including Brexit and the unexpected election of political novice Donald Trump to U.S. President in November, Asia ex-Japan stocks are poised to post a 3.3 percent gain.

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Despite the modest figure — the Dow Jones Industrial Average, in contrast, is up a whopping 14 percent — that is the Asian index’s best performance in four years and follows two years of losses.

Japan’s Nikkei retreated 0.7 percent on a stronger yen, on track for a 0.1 percent loss in 2016. That is its worst in five years, with the yen’s 22 percent surge in the first half of the year slamming the index.

The Japanese currency has since dropped 15 percent, most of that reflecting exuberance over Trump’s anticipated stimulatory policies, but looks set to end the year over 3 percent higher.

The greenback, which has soared almost 11 percent against the yen since before the election results were announced, is set to end the year down a little over 3 percent.

It was last down 0.2 percent at 116.41 yen, extending a 0.5 percent slump seen overnight.

The dollar index, which tracks the greenback against a basket of six major global peers, dropped 0.5 percent to 102.17 on Friday, following a 0.6 percent slide on Thursday. It is poised to end 2016 3.5 percent higher.

The Chinese yuan is on track to end the year weaker. The dollar has strengthened 7.1 percent versus the Chinese currency.

U.S. bond yields, which have reversed course to increase over the past two weeks as investors have sheltered in safer assets, continued that trend. They were at 2.4714 percent early on Friday, a little above a two-week low touched overnight.

Gold held near a two-week high, basking in its safe haven status amid the broad pull back in risk amid reduced liquidity.

Spot gold edged up 0.3 percent to $1,162.14 an ounce, adding to its 1.5 percent surge on Thursday. It’s set to end the year up 9.6 percent.

Oil prices inched up after sliding on Thursday in its first day of losses this week, after a surprising rise in U.S. inventories.

US crude added 0.3 percent to $53.95 a barrel on Friday, after falling 0.5 percent on Thursday. It is on track for a whopping 47 percent surge this year, recovering most of its 2015 losses.

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