Asia Markets

Asia markets sink as Japan, Australia see sharp sell-off

Asian shares open on the back foot

Asia markets were broadly lower, with Japanese shares leading losses and the Australian benchmark index slipping to a four-month low, as investors flocked to safe-haven assets amid worries about the U.S. election.

The most recent market jitters over the race to the White House started in earnest a week ago, after the Federal Bureau of Investigation (FBI) said it was investigating new emails related to Democratic nominee Hillary Clinton's use of a private server when she was secretary of state.

Following news about the FBI's investigations, some polls showed the presidential race in battleground states was tight, with Republican nominee Donald Trump appearing to gain some ground.

Japan's closed down 229.32 points, or 1.34 percent, at 16,905.36, while the Topix index fell 21.4 points, or 1.56 percent, to 1,347.04, with shares coming under pressure from a stronger yen.

The yen, which is considered a safe haven asset, strengthened against the dollar to trade as high as 102.81 on Friday in Asia, climbing from levels above 104 reached earlier this week. As of 2:04 p.m. HK/SIN, the dollar/yen traded at 103.21.

Relative strength in yen pushed major Japanese exporters lower, with Toyota shares closing down 4.04 percent, Sony lower by 2.76 percent and Mazda Motor down 5.08 percent.

Across the Korean Strait, the Kospi closed down 1.78 points, or 0.09 percent, at 1,982.02.

Australia's benchmark ASX 200 closed down 44.75 points, or 0.86 percent, at 5,180.80, declining for five consecutive sessions to end at a level not seen since late June. The energy sector slipped 0.90 percent, while the heavily-weighted financial sector fell 1.60 percent.

The country's so-called "Big Four" banks finished lower, with the National Australia Bank dropping 5.99 percent to 25.88 Australian dollars a share. Traders said NAB shares had gone ex-dividend; the bank announced a dividend of 99 Australian cents ($0.76) a share last week.

Other major banking stocks also fell, with ANZ shares down 1.50 percent, the Commonwealth Bank of Australia 0.87 percent lower and Westpac down 0.54 percent.

Stocks in the Greater China region erased gains made in morning trade.

In Hong Kong, the was flat in late-afternoon trade, retracing earlier advances of nearly 0.2 percent, while Taiwan's Taiex also finished flat. Chinese mainland shares closed lower, with the composite down 3.86 points, or 0.12 percent, at 3,125.07, and the Shenzhen composite off by 4.43 points, or 0.21 percent, to 2,067.15.

Major indexes in Singapore, Indonesia and Thailand were also lower.

"Markets are currently attempting to strike the right balance between the greater probability of a Clinton win and the possibility of a significant sell-off on a Trump victory," Ric Spooner, chief market analyst at CMC Markets, explained in a morning note.

Gold, considered a safe haven asset, saw some pressure in the afternoon during Asian hours, with falling from a session high of $1,304.35 an ounce to $1,297.52 as of 2:12 p.m. HK/SIN.

The precious metal had climbed from Tuesdays levels below $1,280, as political uncertainty in the U.S. led some investors to turn to low-risk assets.

In the broader currency market, the advanced marginally against a basket of currencies to trade at 97.28 but it was still lower than levels above 98.70 reached late last week. Investors will look ahead to the October U.S. non-farm payroll number, due on Friday morning local time, with some analysts saying early indicators suggested the data would be relatively weaker.

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"Taking a look at the leading indicators for non-farm payrolls, the service sector reported slower job growth, jobless claims rose to a three-month high, driving the four-week average up to 257,000," said Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, in a late-Thursday note.

"ADP reported a smaller increase in corporate payroll growth and confidence is down all around," Lien added.

Elsewhere, the pound climbed steadily from levels below $1.22 reached in the previous week to trade near $1.25 on Friday during Asian hours. As of 2:14 p.m. HK/SIN, the currency pair traded at $1.2461.

The currency, which had been under pressure since the UK's decision to leave the European Union (EU) in June, saw some relief on Thursday after England's High Court ruled that the British government required parliamentary approval to trigger the process of exiting the EU.

In company news, shares in Takata closed down 1.75 percent, following a report from the Nikkei business daily that the troubled airbag maker was preparing to file for possible bankruptcy protection in the U.S. due to mounting costs related to its defective air bag inflators.

Takata said in a statement that it had nothing to announce in relation to Nikkei's report.

On Friday, Takata raised its forecast for full-year profit to 20 billion yen ($194 million) for the 12 months to March, up from a forecast net profit of 13 billion and a net loss of 13.1 billion yen in the same period a year ago, according to Reuters. The forecast excludes the cost of recalling the faulty air bags, which have been linked to 16 deaths. The company is currently seeking a new financial backer.

Shares in Australian explosives maker Orica surged 8.33 percent, after earlier reporting an annual net profit before one-offs of 389 million Australian dollars ($299 million) for full year 2016, which was down 7 percent on-year.

Oil prices advanced during Asian hours on Friday, with U.S. crude futures up 0.27 percent at $44.78 a barrel as of 2:16 p.m. HK/SIN, while Brent added 0.24 percent to $46.46.

Stateside, the fell 28.97 points, or 0.16 percent, to 17,930.67. The S&P 500 index slipped 9.28 points, or 0.44 percent, to close at 2,088.66, while the fell 47.16 points, or 0.92 percent, to 5,058.41.

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