TOKYO: Asian shares were on the defensive on Friday after a series of surveys on factory output signaled a tough outlook for the region's manufacturers, though Japanese equities were a notable exception, logging their longest winning run in 54 years on a weaker yen.
Several surveys on Friday suggested Asia's manufacturers face a challenging business climate in the coming months, with China's vast factory sector managing only a shallow rebound at the start of 2013 as feeble foreign demand dragged on sales.
Two separate surveys of China's purchasing managers' index (PMI) showed that factory output in the world's second-biggest economy rose in January, but the pace of the revival in activity was uneven.
China's official PMI logged a reading of 50.4, easing from December's 50.6 and below forecasts for a nine-month high of 50.9. A separate private sector PMI released by HSBC, however, rose to a two-year high of 52.3.
"It seems new orders for exports have declined even when new orders overall rose, suggesting that infrastructure spending and other investment to spur domestic demand is needed to keep (China's) economy growing," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory.
"But it's not going to change the view about the Chinese economy recovering. The official data was just neither good nor bad."
Other PMI releases showed manufacturing growth slowed or stalled in India and South Korea, while factories in Indonesia said business shrank in January from December for the first time in eight months.
The commodity-linked Australian dollar fell 0.3 percent to session lows around $1.0382.
"Australia is a high-yielding country and there are a lot of foreign funds coming here and that is supporting the market," said Macquarie Equities division director Lucinda Chan.
Investors' focus now turns to the U.S. nonfarm payrolls report, which will likely show a rise of 160,000 jobs and the jobless rate staying steady at 7.8 percent.
Manufacturing purchasing managers' indexes from the United States and the euro zone, as well as the Institute for Supply Management's manufacturing index, are also due later in the session.
"The euro revival looks set to continue for some time, as investors return to euro zone bond markets, content with the combination of the European Central Bank backstop for sovereign risk and low inflation danger due to lack of economic growth. The dollar bloc looks to be a key loser in the portfolio reallocation back into EUR," Westpac bank said in a note.
YEN STILL UNDER PRESSURE, NIKKEI SHINES
The dollar advanced further against the yen, up 0.6 percent to 92.25 yen, having earlier hit its highest since June 2010 of 92.27. The euro extended gains, soaring 1 percent to its highest since April 2010 of 125.75.
The yen also plunged to its lowest since August 2008 against both the Australian dollar, at 95.84 yen, and against the New Zealand dollar at 77.58 yen.
"The yen selling is seen as a safe bet because Prime Minister Shinzo Abe has not faltered on his election pledge about beating deflation, highlighting the government's resolve," said Kimihiko Tomita, head of forex at State Street in Tokyo.
Oil and copper prices firmed and the euro extended gains against the dollar, reflecting a recent trend of improving sentiment across asset classes, underpinned by easing stress in the euro zone and a generally positive global economic outlook.
"Chinese data should get stronger into the second quarter. Global indicators are improving, so it makes sense to a certain extent that speculators are taking another look at copper," said analyst Bonnie Liu of Macquarie in Singapore.
London copper added 0.6 percent to $8,213.50 a tonne.
U.S. crude futures inched up 0.1 percent to $97.56 a barrel while Brent hit its highest in over three months at $115.91. - Reuters