Asia markets mostly up but caution reigns, dollar struggles

A man looks at an electric quotation board flashing share prices of the Tokyo Stock Exchange (TSE) in front of a securities company in Tokyo on Jul 26, 2016. (AFP/Toru Yamanaka)

Analysts said Trump's weekend Twitter outburst accusing his predecessor Barack Obama of tapping his phones during the election campaign had also spooked investors, while the dollar was unable to break past ¥114 despite a US interest rate hike all but certain.

While Trump's speech to Congress last week fired optimism that he would press on with a big-spending, tax-cutting programme, he has provided nothing in the way of colour since.

Adding to the sense of trepidation were Trump's claims about Obama and his call for Congress to investigate the unsubstantiated allegations, as well as the leaking of classified information linked to the tycoon's ties with Russia.

"After a spectacular performance addressing the joint sitting of Congress put the Trump presidency back on track, the weekend tweets reminded everyone that this Russian question needs to be addressed and answered," Greg McKenna, chief market strategist at CFD and FX provider AxiTrader, said in a note.

"It also reminded investors that there are distractions which could slow down the execution and implementation of the tax and infrastructure spending plans they have put so much faith in recently," McKenna said.

STAYING AWAY

US shares, which last week touched record highs, started this week in the red, with all three main indexes down, while European markets also retreated on profit-taking and concerns about financial giant Deutsche Bank.

Eyes now turn to the release Friday of US jobs data, which will provide fresh clues about the Federal Reserve's plans for monetary policy, which comes after China unveils economic figures Wednesday.

Asian markets were mostly higher, with Hong Kong adding 0.4 per cent, Shanghai ending 0.3 per cent up and Sydney 0.3 per cent higher while Seoul put on 0.6 per cent.

However Tokyo shed 0.2 per cent, extending Monday's losses that came after North Korea's quadruple missile launch, three of which landed in Japanese-controlled waters, stoking regional security fears.

Wellington, Manila and Jakarta were also down.

Kiyoshi Ishigane, chief strategist at Mitsubishi UFJ Kokusai Asset Management, told Bloomberg News: "We're yet to see what the latest non-farm payrolls data look like.

"Also the market has yet to figure out what path beyond March the (Fed policy committee) will be taking. Ahead of major events in the US like the Fed meeting, investors tend to stay away from trading."

The dollar remained wedged below ¥114, with Fed boss Janet Yellen's near confirmation of a March rate hike failing to fan fresh gains. Analysts said the rise had been cooked into prices already and there was unlikely to be any near-term driver to push the greenback to ¥115.

In early European trade London and Paris each put on 0.1 per cent and Frankfurt was flat.

- Key figures around 0800 GMT -

Tokyo - Nikkei 225: DOWN 0.2 per cent at 19,344.15 (close)

Hong Kong - Hang Seng: UP 0.4 per cent at 23,681.07 (close)

Shanghai - Composite: UP 0.3 per cent at 3,242.41 (close)

London - FTSE 100: UP 0.1 per cent at 7,358.36

Euro/dollar: UP at US$1.0600 from US$1.0582

Pound/dollar: DOWN at US$1.2224 from US$1.2236

Dollar/yen: DOWN at ¥113.78 from ¥113.90

Oil - West Texas Intermediate: DOWN seven cents at US$53.13 per barrel

Oil - Brent North Sea: DOWN 11 cents at US$55.90 per barrel

New York - Dow: DOWN 0.2 per cent at 20,954.34 (close)