Asia stocks slip, dollar up

HONG KONG: Asian stocks slipped and the U.S. dollar drifted higher on Friday, as investors braced for the December U.S. payrolls data, expected to show sharp job losses and deal another blow to hopes for a speedy recovery this year.

The world's largest economy probably shed more than half a million jobs last month, bringing job losses in 2008 to a post-war record, boding ill for Asia's struggling exporters who have been starved of demand from developed nations. Global equities, emerging market currencies and high-grade credit had all benefited in the last month from a steady improvement in investors' risk tolerance. However, dour corporate outlooks, including from the world's top retailer Wal-Mart, and prospects for higher unemployment have curbed appetite for riskier assets.

The MSCI index of stocks in the Asia-Pacific region outside Japan edged 0.5 percent lower, creeping further away from a one-month high reached on Wednesday. Japan's Nikkei share average fell 0.8 percent, with big exporter stocks such as Honda Motor Co and Canon Inc among the biggest drags on the index. South Korean stocks were the region's biggest decliners, with the benchmark KOSPI down 1.8 percent after the country's central bank cut interest rates by 50 basis points to a record low and warned Asia's fourth-largest economy would slow further. Policymakers in China, India and Korea were the most aggressive in Asia in trying to protect their economies as the worsening global downturn really bit into the region in the second half of 2008. But other Asian countries have lately had to step up their actions with export sectors gutted, domestic growth crippled and bank lending still sluggish. Taiwan unexpectedly slashed rates and Indonesia eased by more than forecast this week. Bond market investors meanwhile have been more focused on new global bond issuance, hungry for higher yields, particularly with credit markets showing signs of stabilization.