Asian markets down as investors eye US jobs report

Japanese stocks started the session higher, but early gains were erased on Friday, with Tokyo’s benchmark Nikkei 225 briefly hitting a record high as investors braced for a U.S. jobs report.

The broad Topix index also surpassed its previous peak, set in 1989. European markets rose on Thursday on reassuring election news in Britain and France.

“The fact that the Topix index, which tracks the overall health of the Japanese market, broke its own record is news of great significance,” said analyst Takuma Ikemoto of Tokai Tokyo Intelligence Lab.

The capitalization of Japan’s Prime Market stock market rose significantly, showing that “Japanese companies are steadily improving their ability to generate profits and… indicating that the Japanese stock market has entered a new phase,” he added.

The yen continued to strengthen against the dollar after hitting its lowest level in almost four decades.

News that Samsung Electronics is forecasting second-quarter profits to exceed expectations by more than 25 percent due to rising chip prices and stronger demand for generative artificial intelligence boosted the company’s stock price and boosted the market in Seoul.

However, shares in Hong Kong and mainland China fell after the European Union on Thursday imposed additional temporary tariffs of up to 38 percent on Chinese imports of electric cars.

A European Commission investigation launched last year found that state subsidies for Chinese electric vehicle makers unfairly disadvantaged European rivals that Brussels wants to protect as they transition from heat to electricity.

Trading in Europe was dominated by the results of two important elections, while investors paid attention to poll results in the UK and France.

The return of the main opposition party, Labour, to power in the UK ended 14 years of Conservative rule and boosted the pound even before the results were announced.

After the Prime Minister’s game of chairs in Downing Street, the expected period of stability brought optimism to investors.

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In France, efforts to prevent the far-right from taking power helped strengthen the euro and boost European markets.

But analysts fear the European Union’s second-largest economy could find itself in a period of political stalemate if polls fail to produce a winner.

Investor sentiment also improved on Thursday as weaker U.S. labor market data gave the Federal Reserve room to cut interest rates, and another key employment report is due on Friday.

“We expect U.S. labor market data in June to show more signs of cooling,” said Alvin Tan of RBC Capital Markets.

Gains were limited as Wall Street was closed for the US Independence Day holiday on July 4.

– Key figures around 03:30 GMT –

Tokyo – Nikkei 225: DOWN 0.3 percent to 40,789.59

Hong Kong – Hang Seng Index: DOWN 1.0 percent to 17,850.47

Shanghai – Composite: DOWN 1.2 percent to 2921.92

Euro/Dollar: UP from 1.0823 to 1.0813 to …

Pound/dollar: UP from 1.2770 to 1.2765 to …65 to 1.2765 to 1.2765 to 1.2765 to 1,

Dollar/yen: DOWN from 161.16 yen to 160.62 yen

Euro/pound: RISE from 84.75p to 84.69p

West Texas Intermediate: DOWN 0.2 percent to $83.66 a barrel

North Sea Brent crude: DOWN 0.3 percent to $87.10 a barrel

New York – Dow: Closed for public holiday

London – FTSE 100: UP 0.9% to 8241.26 points (close)

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