Updated on
Summary Tokyo fell by 1.13 percent, Seoul shed 1.11 and Sydney closed 1.12 percent lower.
Asian markets retreated and the euro came back under pressure on Friday after the European Central Bank dashed traders hopes for strong policy actions to support troubled eurozone economies.Downbeat earnings reports from two of Japans biggest electronics firms also weighed on the Nikkei, with Sharp losing more than a quarter of its value in the morning session.Tokyo fell 1.13 percent, or 98.07 points, to 8,555.11, Seoul shed 1.11, or 20.72 points, to 1,848.68 and Sydney closed 1.12 percent, or 48.0 points, lower at 4,221.5.In the afternoon Hong Kong shed 1.07 percent, but Shanghai was 0.27 percent up.Markets were deflated by the ECBs decision to hold off any concrete moves to support the euro such as bond buying, which many had hoped for after bank chief Mario Draghi said last week it would do whatever was needed to save the euro.On Thursday he reiterated that the ECB was ready to step into the bond markets -- but not just yet.Draghi insisted the onus was on eurozone governments, saying they must carry out promised reforms and turn to the regions bailout funds before the ECB could step in.In the face of growing pressure, the ECB may undertake outright open market operations of a size adequate to reach its objective, he said, but added that the details would be worked out in the coming weeks.Whatever the circumstances, Draghi said it was pointless to bet against the euro. It stays. It stays. It stays, he insisted.However investors, who had sent global markets surging over the past week as they factored in some sort of action, were unimpressed and Spanish borrowing costs bounced back above the seven percent danger level.The delay in actions may last until the next ECB meeting (September 6), said Anthony Lam, strategist at Credit Agricole. In the meantime, a downbeat mood will continue hanging over the market.The let-down came after the US Federal Reserve had said on Wednesday that it would take a wait-and-see approach before unveiling any stimulus for the worlds number one economy.The news rippled around global markets, with London losing 0.88 percent, Frankfurt 2.20 percent off and Paris 2.68 percent lower, while Madrid shares plunged 5.16 percent and Milan was 4.64 percent off.On Wall Street the Dow fell 0.71 percent, the Nasdaq lost 0.36 percent and the S&P 500 dropped 0.74 percent.In foreign exchange trade the euro, which tumbled after the ECB announcement, remained under pressure in Tokyo as investors moved out of riskier assets and into safer bets such as the yen and dollar.The common unit bought $1.2183 and 95.30 yen in afternoon trade, compared with $1.2178 and 95.26 yen in New York late Thursday. It was significantly down from the $1.2250 and 96.12 earlier in Asia before the ECB meeting.The dollar was at at 78.17 yen from 78.22 yen.In Tokyo Sharp shed 28.08 percent a day after it said losses in the first quarter to June almost trebled from last year and it warned its full year loss would be wider than first thought.Sony also lost seven percent after reporting its quarterly loss had widened while also cutting its full-year profit forecast.Eyes will now be on Washington where US employment data for July is due to be released, providing a clearer indication as to the state of the economy.Oil prices were higher. New Yorks main contract, light sweet crude for September delivery advanced 50 cents to $87.63 a barrel and Brent North Sea crude for September was 46 cents higher at $106.36.Gold was at $1,589.60 at 0600 GMT, from $1,602.40 on Thursday.
