Asian shares, euro fall but dollar rallies after ECB move

Asian shares and the euro slipped Friday while the dollar hit its highest level against the yen since the financial crisis after the European Central Bank unveiled a fresh round of measures to fight off deflation. With the ECB announcement sending investors scurrying out of the euro, the dollar was the main beneficiary, while analysts said the greenback could rise further if a US jobs market report later in the day shows further improvement. However, after a broadly healthy run-up in equities this week profit-takers tempered buying sentiment, while Wall Street also provided another soft lead. Tokyo gave up initial advances that were fuelled by the weak yen to end slightly lower, dipping 7.50 points to 15,668.68. Sydney lost 0.58 percent, or 32.6 points, to close at 5,598.7 and Seoul eased 0.33 percent, or 6.85 points, to 2,049.41. Hong Kong retreated 0.23 percent, or 57.77 points, to 25,240.15. However, Shanghai rose 0.85 percent, or 19.57 points, to 2,326.43 as investors bet on government measures to boost the economy following a weak batch of recent data. ECB policymakers cut interest rates Thursday to 0.05 percent from 0.15 percent. They also cut the deposit rate to minus 0.2 percent from minus 0.1 percent, meaning lenders would have to pay more to keep their cash at the central bank. The move is aimed at boosting lending to businesses and consumers in order to kick-start the economy and fend off deflation. Bank chief Mario Draghi also unveiled plans to buy asset-backed securities (ABS) to help boost lending in the region, as well as a programme to purchase covered bonds. The decision showed the bank's leaders understood that "they were running out of time", said Boris Schlossberg, managing director at BK Asset Management. "They realised that the situation is pretty severe," he added. "They simply can not do nothing, they have to do some kind of reaction to stimulate demand." - Focus on US jobs data - The news immediately hit the euro, which sank below $1.30 on Thursday for the first time since July 2013. It ended the day in New York at $1.2945. However, it slipped further in Tokyo Friday, buying $1.2939. It also fetched 136.28 yen, down from 136.22 yen in New York and well down from the 137.85 yen earlier Thursday in Asia. Euro-aversion had a knock-on effect for the dollar, which jumped to 105.69 yen in Asia Friday -- its highest level since October 2008 -- before edging back to 105.32 yen in the afternoon. Adding to dollar strength is an expectation the Fed will bring forward an interest rate hike as the US economy picks up pace, while Bank of Japan chiefs consider further easing measures as they struggle with tepid growth. Eyes are now on the release of US jobs data later Friday, which could have a bearing on Fed policy. On Wall Street the three main indexes ended lower, despite the more accommodative policy from the ECB. The Dow eased 0.05 percent, while the S&P 500 slipped 0.15 percent and the Nasdaq lost 0.22 percent. Oil prices were mixed. US benchmark West Texas Intermediate for October delivery rose 30 cents to $94.75 while Brent crude for October delivery rose 19 cents to $102.02. Gold was at $1,265.46 an ounce in afternoon European trade, from $1,269.92 late Thursday. In other markets: -- Taipei fell 0.22 percent, or 20.95 points, to 9,407.94. Smartphone maker HTC shed 2.22 percent to Tw$132.0 while Taiwan Semiconductor Manufacturing Co. was 0.39 percent lower at Tw$127.0. -- Wellington rose 0.48 percent, or 25.32 points, to 5,253.87. Fletcher Building was up 0.11 percent at NZ$9.25 and Contact Energy added 2.20 percent to NZ$5.57. -- Manila added 0.83 percent, or 59.47 points, to 7,263.58. Philippine Long Distance Telephone Co. shed 1.10 percent to 38 pesos while Bank of the Philippine Islands gained 0.32 percent to 0.30 pesos. -- Singapore closed down 0.14 percent, or 4.61 points, to 3,341.73. Oil rig maker Keppel Corp fell 0.18 percent to Sg$10.83 while Singapore Telecommunications eased 0.51 percent to Sg$3.91. -- Kuala Lumpur ended flat at 1,868.46. Financial firm CIMB Group Holdings slipped 0.7 percent to 7.23 ringgit, while plantation conglomerate IOI gained 0.4 percent to 4.81 ringgit. -- Jakarta closed up 0.23 percent, or 12.01 points, at 5,217.34. Bank Negara Indonesia climbed 1.78 percent to 5,725 rupiah, while Hero Supermarket lost 1.00 percent at 2,475 rupiah. -- Bangkok added 0.29 percent, or 4.59 points, to 1,584.32. Bangchak Petroleum lost 1.43 percent to 34.50 baht, while Siam Cement rose 2.28 percent to 448.00 baht. -- Mumbai retreated 0.22 percent, or 59.23 points, to 27,026.70. Jaiprakash Associates fell 10.34 percent to 330.80 rupees, while Jaypee Infratech lost 7.23 percent to 26.95 rupees.