Asian stocks round out strong quarter with caution

People walk past an electronic stock quotation board outside a brokerage in Tokyo, on Sept 22, 2017. PHOTO: REUTERS

SYDNEY (BLOOMBERG) - The US dollar on Friday (Sept 29) headed for the best week this year on hopes US tax reform will aid economic growth. Asian stocks opened mixed on the final trading day of what's been a strong quarter, with emerging markets coming under pressure.

Japanese shares edged lower, while they were modestly higher in South Korea and Australia. The S&P 500 Index eked out all-time highs and the Russell 2000 Index of smaller companies extended its quarterly surge. End-of-quarter volatility would not be a surprise on Friday and some major markets, including China, will shut next week for a holiday. Oil slipped after climbing into a bull market this week.

The chances of higher US interest rates by the end of the year now sit at about 65 per cent, as investors bet the world's largest economy can handle tighter policy, sending equities higher and driving money out of gold. Trump's tax plan, which still needs approval from Congress, currently lacks detail, leaving investors guessing which parts of the package will be prioritized by the administration.

While the Bloomberg Dollar Spot Index has done well this week on the back on the tax proposal, it's still headed for a third straight quarterly drop, the longest such losing streak since 2011 and pushing its loss in 2017 above 8 percent. Gold traded near the lowest since August, on track for the worst month of the year.

The Topix index fell 0.3 per cent as of 9:22am Tokyo time. The Kospi index in Seoul climbed 0.5 per cent. South Korea's markets will be closed next week for a holiday.

Contracts on Hong Kong's Hang Seng Index rose.

Futures on the S&P 500 were little changed. The underlying gauge added 0.1 per cent to a record 2,510.06. The Russell 2000 climbed 0.3 per cent.

The MSCI Emerging Markets Index was up 0.1 per cent after six days of losses.

The MSCI Asia Pacific Index is down for six days in a row going into Friday. Still, it is set to complete its third quarterly gain, the best run since the end of the first quarter 2013.

The Bloomberg Dollar Spot Index was steady after dipping 0.2 per cent.

The yen lost 0.2 per cent to 112.57 per dollar.

The euro was at US$1.1779 after advancing 0.4 per cent.

West Texas Intermediate crude was at US$51.59 a barrel. Oil fell 1.1 per cent in the Thursday session, reversing course after touching the highest level since April earlier in the session.

Gold was little changed at US$1,287.25 an ounce.

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