July 8 (Reuters) – Asian shares were steady in early Friday trade as investors brace for U.S. jobs data to see if the world’s no. 1 economy is resilient enough to weather the fallout from the Brexit vote.
MSCI’s broadest index of Asia-Pacific shares outside Japan were down 0.1 percent while Japan’s Nikkei was up 0.5 percent.
On Thursday, U.S. S&P 500 Index ended down 0.1 percent as high dividend shares succumbed to profit-taking, though gainers outnumbered decliners by 1.2-to-1.
With the European economy rocked by Britain’s decision to leave the European Union, investors are counting on the resilience of the U.S. economy to support global growth.
“While financial markets seem to have absorbed the initial shocks from the Brexit, there’s no change in the fact that there is big uncertainty ahead. Investors would need the U.S. economy to be stable,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
Ahead of the closely-followed payrolls report later on Friday, U.S. data published on Thursday was mostly positive.
U.S. private payrolls increased more than expected in June as small businesses ramped up hiring, and fewer Americans applied for unemployment benefits last week.
The consensus forecast for Friday’s non-farm payrolls data is for 175,000 jobs gain for June, according to a Reuters poll, but investors remained wary given the unexpected negative surprise in payrolls the previous month.
“I would say numbers around the consensus figure will be the most comfortable for markets. Anything below 100,000 will scare investors while reading above 200,000 could rekindle talk of a Fed rate hike even though I suspect people would not seriously expect the Fed to raise rates soon,” said Daiwa’s Kabeya.
The immediate concerns for investors revolve around the Brexit vote, and already there mounting signs of disruption in the European economy.
UK consumer sentiment posted its biggest drop in more than five years.
Concerns about the health of European banks are smouldering even though their shares rebounded mostly on Thursday.
The British pound was steady for now at $1.2905, but it still stood just about a cent above its 31-year low of $1.2798 touched on Wednesday.
Having slipped 2.8 percent so far this week, it looks set to post its third straight week of losses.
The euro eased to $1.1064, having shed 0.3 percent on Thursday, not far from this week’s low of $1.1029 set on Wednesday.
The yen gained 0.6 percent on Thursday to 100.72 yen per dollar, coming within sight of retesting Wednesday’s high of 100.20, as the Japanese currency is seen as a safe-haven at times of distress.
U.S. bond prices retreated a bit on profit-taking after the 10-year yield hit a record low of 1.321 percent earlier this week. It last stood at 1.390 percent.
Still, analysts expect U.S. bonds to continue luring investors’ funds escaping Europe.
Oil prices fell 5 percent to two-month lows on Thursday after the U.S. government reported a weekly crude draw within analysts’ forecasts that disappointed market bulls expecting larger declines.
Brent crude futures hit a two-month low of $46.15 per barrel on Thursday and last traded at $46.94.