Japan stocks retreat, euro higher as Greece deadline looms

GMT 03:32 2015 Wednesday ,03 June

Arab Today, arab today Japan stocks retreat, euro higher as Greece deadline looms

Japan stocks
Hong Kong - AFP

Japanese shares extended losses Wednesday after ending a 12-day rally in the previous session, while the euro edged higher following upbeat eurozone inflation data as traders track Greece's debt reform talks ahead of a repayment deadline.

Tokyo retreated 0.42 percent in the morning, Sydney lost 0.52 percent and Shanghai eased 0.10 percent, but Hong Kong added 0.91 percent and Seoul was 0.29 percent higher.

Dealers moved out of Japanese equities for a second day after the Nikkei chalked up an impressive rally not seen since 1988, at the height of the country's stock market bubble.

Selling was fuelled by a pick-up in the yen, which on Tuesday hit its weakest level against the dollar in more than 12 years.

The greenback fell with US stocks on Wednesday owing to concerns about the lack of progress in Greece's talks with its creditors on overhauling its bailout terms.
The Dow lost 0.16 percent, the S&P 500 dipped 0.10 percent and the Nasdaq shed 0.13 percent.

On currency markets the dollar was at 123.93 yen early Wednesday against 124.09 in New York. The greenback briefly touched 125.05 yen in Asia Tuesday.

The euro bought $1.1168 and 138.43 yen from $1.1152 and 138.39 yen in US trade.

With a deadline for Greece to repay some of its debt on Friday, the country's leaders and its creditors have exchanged reform proposals, although there are still fears an agreement may not be reached.

Investors were spooked Tuesday when Jeroen Dijsselbloem, the head of the Eurogroup of finance ministers said he was unimpressed with progress.

His remarks come as Greek Prime Minister Alexis Tsipras prepares to meet European Commission President Jean-Claude Juncker in Brussels on Wednesday evening.

There are worries that if Greece defaults on its debts the country could end up tumbling out of the eurozone.
"The euro clearly has the ability to lead the dollar higher or lower across the board, and really that vulnerability stems from very different potential outcomes you get from the negotiations between Greece and its creditors," Raiko Shareef, a markets strategist at Bank of New Zealand, told Bloomberg News.

The single currency was also boosted by data showing eurozone inflation climbed to 0.3 percent in May -- the first rise in five months and raising hopes the region is recovering -- while Germany and Spain released solid labour reports.  

The results came ahead of Wednesday's meeting of the European Central Bank and a subsequent news conference with ECB Chief Mario Draghi.

Oil prices slipped after sharp gains on Tuesday fuelled by the weaker dollar. US benchmark West Texas Intermediate for July delivery fell 36 cents to $60.90 while Brent crude for July eased 32 cents to $65.17.

Gold fetched $1,194.06 compared with $1,190.90 late Tuesday.


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