TOKYO, Sept 27 — Asian shares were on course for a second straight week of losses today as the release of a whistleblower complaint against US President Donald Trump heightened uncertainties about the global economy, already reeling from Sino-US trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.09 per cent, having fallen 1.4 per cent so far this week, while Japan's Nikkei slid 0.54 per cent.
US S&P500 futures lost 0.08 per cent in early Asian trading after the index lost 0.24 per cent yesterday.
A whistleblower report released yesterday said President Donald Trump not only abused his office in attempting to solicit Ukraine's interference in the 2020 US election for his political benefit, but that the White House tried to “lock down” evidence about that conduct.
The report came after the US House of Representatives Speaker Nancy Pelosi launched an impeachment inquiry into him this week.
“The start of the impeachment inquiry adds a new element of uncertainties to markets, in addition to ongoing concerns about the US-China trade war and the risk of a US recession,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“While no one thinks the Senate will vote for his impeachment given the Republican majority there, we could see more new revelations during a long investigation process,” he added, noting that US stocks fell considerably when former President Bill Clinton was impeached.
On trade issues, news headlines were too mixed for investors to show a clear reaction.
CNBC reported that trade war talks were scheduled for October 10-11 in Washington, citing people familiar with the arrangements, and China's top diplomat said China was willing to buy more US products.
But other media reports yesterday that the United States is unlikely to allow American firms to supply China's Huawei Technologies undermined hopes of a complete deal.
The damage is already evident with Micron Technology Inc, a major Huawei supplier, which forecast first-quarter profit below Wall Street targets, pushing its share prices down 7 per cent in after-hours trade.
In the currency market, the euro flirted with 2 1/2-year lows amid concerns about sluggish growth in the currency bloc, with fear of recession in its powerhouse, Germany.
The euro stood at US$1.0918 after hitting a near 2 1/2-year low of US$1.0909.
Some market players suspect the dollar was also helped by continued tightness in dollar funding after US short-term borrowing costs shot up last week.
The US dollar traded at 107.82 yen, after climbing to 107.96 yesterday.
Sterling traded at US$1.2327, near two-week low of US$1.2303 hit yesterday, as investors waited for the British parliament's next attempt to break the Brexit impasse.
The Mexican peso weakened to a 2 1/2-week low of 19.675 to the US dollar after Mexico's central bank cut its key interest rate yesterday, with more cuts seen on the horizon.
Oil prices steadied off two-week lows as a Pentagon statement intensified concerns of a Middle East conflict and supply disruptions, although the impeachment inquiry into US President Donald Trump kept risk assets broadly in check.
Brent crude futures fell 0.53 per cent to US$62.41 (RM261.24) a barrel but stayed above Wednesday's low of US$61.23, while US West Texas Intermediate (WTI) crude lost 0.2 per cent to US$56.30 per barrel, off their low of US$55.41 yesterday. — Reuters
