By Shinichi Saoshiro
TOKYO (Reuters) – Asian stocks slid and crude oil scaled nine-month highs on Friday as escalating civil war in Iraq dulled risk appetite which had been buoyant just days before.
Spreadbetters expected the sour mood to linger on in Europe, forecasting Britain’s FTSE to open as much as 0.4 percent lower, Germany’s DAX down 0.25 percent andFrance’s CAC 0.26 percent lower.
The yen, however, benefited from its safe-haven status and a decline in U.S. Treasury yields following soft U.S. data that dented economic optimism.
Sunni Islamist militants have extended their advance south towards Baghdad and prompted President Barack Obama to warn of possible U.S. military intervention, while Iraqi Kurdish forces took control of the Kirkuk oil hub amid the chaos.
Weaker-than-expected U.S. retail sales and jobless claims data published on Thursday further tempered economic optimism felt earlier in the week that had propelled Wall Street to record highs.
Taking its cue from an overnight slide in U.S. stocks, MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.3 percent. The index, which hit a three-year high on Monday, was still poised to rise about 0.4 percent this week.
Tokyo’s Nikkei swam against the tide to rise 0.9 percent, on course to end the week on a 0.2 percent gain.
Reaction was muted towards China’s industrial output and retail sales data, which rose in line with forecasts but were not solid enough to show that the world’s second largest economy was on a solid, broad recovery.
Brent crude futures rose towards $114 a barrel on Friday and hit a nine-month high.
“Oil is now in a new price territory and is likely to climb more as investors rework their positions, supported by the uncertainty and technicals,” said Ken Hasegawa, a Tokyo-based commodity sales manager at Newedge Japan.
The dollar edged up 0.3 percent to 101.97 yen but was still stuck in the vicinity of a two-week low of 101.60 hit on Thursday. On the week, the dollar was on course to lose about 0.5 percent against the yen.
After the Bank of Japan stood pat on monetary policy on Friday as widely expected, currency market focus turned to whether Governor Haruhiko Kuroda will maintain his confident stance on the economy when he briefs the media at 0630 GMT.
The euro was little changed at $1.3556 , poised to end the week down about 0.6 percent, hobbled by a widening yield gap between euro zone bonds and their peers following easing by the European Central Bank earlier this month.
The pound gained over a cent overnight to five-week highs after Bank of England Governor Mark Carney said on Thursday that British interest rates could rise sooner than financial markets expect. The pound was last up 0.2 percent at $1.6959 .
In commodities, copper was up on the day but still set for its third straight weekly loss as seasonally strong demand from China passes its peak. Three-month copper on the London Metal Exchange inched up 0.8 percent to $6,671.50 a tonne.
Palladium and sister metal platinum bounced back from the previous session’s slide as South African producers struck a deal with a miners’ union to end a crippling five-month strike.
(Additional reporting by Lisa Twaronite and Ayai Tomisawa in Tokyo, Manash Goswami in Singapore; Editing by Eric Meijer)
