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Asia shares mostly down, dollar under pressure

Asian markets mostly fell on Friday, with Tokyo hit by a stronger yen and data that showed household spending tumbling after a sales tax hike, while investors await the release of key manufacturing data next week.

HONG KONG: Asian markets mostly fell on Friday, with Tokyo hit by a stronger yen and data that showed household spending tumbling after a sales tax hike, while investors await the release of key manufacturing data next week.

The dollar continued to struggle in Asia after dipping on Wall Street following the release of data showing the US economy contracted more than expected in the first three months of the year.

Tokyo fell 0.34 per cent, or 49.34 points to finish at 14,632.38, while Seoul slipped 0.86 per cent, or 17.30 points to 1,994.96. Sydney also closed down, losing 0.49 per cent, or 27 points, to end at 5,492.5.

Shanghai closed flat, edging down 1.39 points to 2,039.21 but Hong Kong was up 0.31 per cent, or 71.51 points, at 23,081.65.

Japanese household spending in April fell 13.3 per cent from March, official data showed, marking the biggest monthly drop since March 2011 when the country was hit by a quake-tsunami disaster.

The slump came in the same month a government hike in sales tax -- from five per cent to eight per cent -- took effect despite warnings that it could hit a nascent economic recovery.

Also, the government said inflation accelerated to 3.2 per cent year-on-year in April from 1.3 per cent in March, largely owing to the effects of the tax rise.

The news comes as Bank of Japan weighs up whether to unveil fresh easing measures to support the economy after the tax rise, with fears that further widening of the monetary base could fan inflation to more than its target of 2.0 per cent.

In other markets, Mumbai fell 0.07 per cent or 16.81 points to 24,217.34 points, Kuala Lumpur's main stock index fell 3.24 points or 0.17 per cent to 1,873.38, while Bangkok added 0.51 per cent or 7.22 points to 1,415.73.

Jakarta fell 1.84 per cent, or 91.67 points, to 4,893.91, Singapore closed 0.15 per cent lower, or 4.86 points, to 3,295.85 and Taipei fell 0.36 per cent, or 33.09 points, to 9,075.91.

Manila closed 0.43 per cent, or 29.02 points, lower at 6,647.65.

US stocks climbed on Thursday as investors brushed off news that the world's biggest economy shrank 1.0 per cent in January-March.

Analysts said that while the drop was more than expected, market players noted it came during a severe winter freeze and that the economy was already firmly rebounding.

There was also some cheer in figures showing new claims for unemployment insurance benefits fell sharply last week to 300,000, pulling the trend line to its lowest level in nearly seven years.

The S&P 500 added 0.54 per cent to close at another record high, while the Dow rose 0.39 per cent and the Nasdaq gained 0.54 per cent.

Focus is now on the release next week of HSBC's closely watched purchasing managers index (PMI) of manufacturing activity from China, the United States and Europe, hoping for signs of further improvement. China is also due to unveil its own official PMI on Sunday.

With last month's readings for China showing a firm pick-up, there are hopes of another healthy result for May that would ease concerns over the Asian economic giant.

In foreign exchange trade, the dollar slipped to 101.68 yen from 101.78 yen on Thursday in New York, where investors left the greenback after the GDP data.

The euro bought US$1.3610 and 138.39 yen against US$1.3601 and 138.44 yen.

Oil prices were lower. US benchmark, West Texas Intermediate for delivery in July, was down 37 cents at US$103.21 a barrel after rallying 86 cents in New York on Thursday. Brent North Sea crude for July eased 12 cents to US$109.85.

Gold fetched US$1,252.67 an ounce at 1058 GMT compared with US$1,254.15 late Thursday.

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