Asia stocks extend global sell-off, Japan down 5.5 percent

U.S. benchmark West Texas Intermediate and Brent both climbed 0.9 percent, but analysts said there was unlikely to be a real recovery in prices any time soon.

We know that when Chinese markets are open they can wreck havoc on currencies and equities but when they are closed the same can happen.

But the unemployment rate fell to 4.9 per cent, the lowest since February 2008, and wages rose, indicating some underlying strength in the labour market despite the weak headline figure.

Ogino added investors would be closely watching USA federal reserve chair Janet Yellen’s testimony to the house financial services committee on Wednesday for any clues that the central bank might be about to change course on interest rates.

Beijing has been struggling to underpin the yuan, which faces depreciation pressure as China’s growth rate slows to its lowest levels in a quarter of a century.

“We had a bubble in people’s expectations of the power of central banks. The People’s Bank of China will likely widen the currency’s trading bank and permit a larger managed slide against the dollar in coming months”.

A launch by North Korea of a long-range rocket carrying what it called a satellite also sparked concern and drew worldwide condemnation. Rises in the yen make Japanese exports less competitive and reduce the value of repatriated profits, a grim prospect for Tokyo policy makers who have counted on Japan’s economy escaping from a lull on the back of high earnings. Major losses were also seen in US stocks with the S&P 500 falling more than 2%.

TOKYO/SYDNEY, Feb 9 The dollar skidded to its lowest levels against the yen since November 2014 on Tuesday, as a sell-off in European and USA stocks continued into the Asian session and stoked demand for the perceived safe-haven Japanese currency.

After hovering around the 117 yen line the previous day, the dollar weakened, dropping below the 115 yen line.

The Swiss franc rose to 0.9874 against the U.S currency, its highest since December.

Stock markets in Europe have managed to eke out some gains despite an earlier slide in Japan’s main index, the latest in a series of dramatic moves in global financial markets.

“A bit of it is positioning”, said Charles St-Arnaud, senior strategist and economist at Nomura Securities International in London.

The MSCI’s index of Asia-Pacific shares outside Japan fell 1% and might have fallen further had several Asian markets not been closed.

Global oil markets fell 3 percent to settle down for a third straight day on worries that US crude stockpiles had reached new record highs, while a Saudi-Venezuela meeting to boost prices showed little progress.

The Aussie managed to hold more of its ground against the greenback, staying above 70 US cents but still down 0.8 percent at $0.7033.

Asian markets tumbled Tuesday as renewed jitters about the global economy set off a wave of selling in banking stocks.

But nothing was decided, so caution kept gains in check. USA crude oil was hovering just above $30 a barrel in Asia on Tuesday after having slipped below the threshold hours earlier.