GLOBAL MARKETS-Asian shares, dollar soft after tepid US jobs

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05-08-2013 11:24:14
GLOBAL MARKETS-Asian shares, dollar soft after tepid US jobs data

* Nikkei leads Asian shares lower, hurt by yen
* Dlr defensive as traders reduce bets on Fed tapering in
Sept
* NZ dlr plunges on food safety scare affecting top exporter
* Aussie hits 3-yr low ahead of likely rate cut by RBA

By Hideyuki Sano
TOKYO, Aug 5 (Reuters) - Asian shares were soft and the U.S.
dollar was on the defensive on Monday after data showed U.S.
employers slowed their pace of hiring in July, while the New
Zealand dollar tumbled after a food-safety scare affected dairy
exports of the country's largest company.
Japan's Nikkei share average <.N225> fell 1.0 percent while
ex-Japan Asian shares <.MIAPJ0000PUS> dropped 0.2 percent, in
contrast to Wall Street which ended at record highs on Friday in
part helped by expectations the U.S. Federal Reserve may delay
scaling back its stimulus.
"I think the yen will undermine Japanese shares while other
regional shares will probably be more supported by gains in Wall
Street shares," said Ayako Sera, senior market economist at
Sumitomo Mitsui Trust Bank.
The dollar slipped to around 98.83 yen , down from a
high around 99.95 seen late last week.
U.S. non-farm payrolls rose by 162,000 in July, more than
20,000 below a median market estimate, and a decline in the size
of the workforce saw the unemployment rate fall to 7.4 percent,
its lowest in more than four years. [ID:nL1N0G31W3]
That saw some banks push back forecasts for when the Fed
would begin tapering its $85 billion-a-month bond buying,
although half of the 18 primary dealers still expect it to start
next month, a Reuters poll showed. [ID:nL1N0G31T4]
U.S. 10-year T-notes traded at a yield of 2.609 percent
, having plunged more than 10 basis points on Friday
after the jobs data.
U.S. interest rate futures <0#FF:> <0#ED:> were firm on
Monday after sizable gains on Friday as traders increased bets
the Fed would wait until 2015 before raising short-term
borrowing costs.
The dollar index <.DXY> was little changed at 81.934, having
fallen 0.5 percent on Friday and coming within sight of a
six-week low of 81.407 hit on July 31.
The euro bought $1.3281 , holding on to most of
Friday's gains.
The biggest mover was the New Zealand dollar, which fell to
a 14-month low after dairy exporter Fonterra , the
country's largest company, found botulism bacteria in some of
its products, which prompted China to halt all milk powder
imports from New Zealand and Australia. [ID:nL4N0G50HU]
The kiwi fell to as low as $0.7670 and last stood
at $0.7745, 1.1 percent below its levels late last week.
"It's a pretty serious development for New Zealand given how
important dairy is. But what usually happens with these food
quality issues is that as details come out, people tend to feel
more reassured," said Chris Tennent-Brown, FX economist at
Commonwealth Bank in Sydney.
The Australian dollar also slipped sharply to a three-year
low of $0.8848 , after the country's retail sales data
fell short of market forecast and reinforced expectations of
further rate cuts by the Reserve Bank of Australia (RBA).
Swap rates now imply a 91 percent chance that rates
will fall 25 basis points to a record low of 2.50 percent at the
RBA's policy meeting on Tuesday.
Oil prices also eased off following the U.S. payrolls data,
with Brent futures standing at $109.03 per barrel, a tad
below the four-month high of $110.09 hit on Friday.

(Additional reporting by Ian Chua in Sydney; Editing by John
Mair and Shri Navaratnam)
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