HONG KONG - Asian stocks followed US equities lower and the yen climbed as investors prepared to close out a volatile year for financial markets. Oil dropped from its highest close in 17 months.
Equities from Hong Kong to Malaysia slumped, with Japanese shares headed toward their biggest drop in more than a month, after the S&P 500 Index fell the most since October as data showed a decline in pending US home sales.
Singapore shares also opened lower, with the benchmark Straits Times Index at 2,883.80 in early trade, down 0.5 per cent, or 14.5 points. Around 35 million shares exchanged hands.
The yen strengthened for a second day as the US dollar fell against most major currencies. Crude futures slipped for the first time in nine days, halting the longest winning streak since 2010. Gold extended gains to a fourth day and government bonds advanced.
Trading has been thin across the globe during the last week of the year, with volumes in crude oil, equities and currencies all below average. Investors sold US equities at the fastest rate since before Donald Trump's election, trimming a post-election rally that took major indexes to all-time highs. The US dollar rose to the highest level in more than a decade on speculation the incoming president will boost public spending.
"A market riding on expectations toward a Trump presidency is coming to a close, and we're starting to focus on reality," said Mitsushige Akino, an executive officer at Ichiyoshi Investment Management in Tokyo. "I expect investors to take a more nervous stance toward U.S. economic indicators from here on."
The MSCI Asia Pacific Index fell 0.2 per cent as of 11:30 a.m. in Tokyo, after breaking a string of six consecutive losses on Wednesday with a 0.2 per cent gain.
Japan's Topix slid 1 per cent. The Nikkei 225 Stock Average is poised to continue its winning streak, up 0.9 per cent for 2016. The Shanghai Composite Index slipped 0.3 per cent and Hong Kong's Hang Seng Index retreated 0.4 per cent.
South Korea's Kospi Index dropped 0.1 per cent, Australia's S&P/ASX 200 fell 0.1 per cent, down from the highest level since August 2015, while New Zealand's S&P/NZX 50 was little changed.