Asian shares slip, Tokyo down on stronger yen

Asian markets were lower on Tuesday as investor concerns lingered over a potential tapering in US monetary stimulus, with a stronger yen dragging down Japanese stocks.

Tokyo shed 1.23 percent, falling for a second consecutive day following a strong performance last week as the dollar remained weak against the yen.

Hong Kong slipped 1.58 percent, pulled down by a sharp fall in HSBC Holdings, after the bank's earnings report disappointed the market.

The global banking giant on Monday announced a 22 percent rise in half-year net profits on lower costs and falling bad-debt charges, but warned that slower Chinese growth was affecting its main market Asia.

In other markets, Shanghai slipped 0.59 percent, Seoul dropped 0.84 percent while Sydney was 0.34 percent lower.

The declines were fuelled by concerns the Federal Reserve may start trimming its stimulus after the US growth outlook appeared firmer as the Institute for Supply Management's July purchasing managers index for the services sector showed a healthy jump in activity.

Official data on Friday showed that the US unemployment rate fell to a better-than-expected 7.4 percent in July from 7.6 percent in June

Some analysts said the positive outlook increased the chances the Fed will start scaling back its huge bond-buying programme in the coming weeks.

But eurozone data provided some relief, with key growth indicators showing that the recession seems to be fading out at last.

A key leading indicator of activity, the Markit Eurozone Composite Purchasing Managers Index for July switched to give a growth reading for the first time for 18 months.

But eurozone retail sales, a key indicator of demand in the economy, slipped by 0.5 percent in June from the previous month, official data showed Monday.

The dollar was 98.02 yen in Asian trade Tuesday compared with 98.27 yen in New York on Monday afternoon.

The euro bought $1.3263 and 129.98 yen against $1.3259 and 130.30 yen in US trade.

On oil markets New York's main contract, West Texas Intermediate for delivery in September, was down 30 cents to $106.26 a barrel in early trade, and Brent North Sea crude for September shed 16 cents to $108.54.

Gold cost $1,290.23 at 0305 GMT compared with $1,310.25 late Monday.

In other markets:

-- Jakarta was closed for a public holiday.