* Nikkei tripped by higher yen, Wall St tech retreat
* European shares set to fall at open
* Emerging markets supported by outlook for easy US policy
* Euro undermined by talk ECB considering further stimulus
By Wayne Cole
SYDNEY, April 7 (Reuters) - Japanese shares were slugged on
Monday by a one-two combination of a higher yen and a selloff in
the tech sector, while the euro struggled with speculation of
more policy easing at home.
Financial spreadbetters expected Britain's FTSE 100
and Germany's DAX to each lose 0.8 percent at the open,
while the S&P 500 E-Mini contract was off 0.16 percent.
The Nikkei retreated 1.6 percent, led by weakness in
technology stocks following a similar fall on Wall Street. Index
heavyweight Softbank led the way with a fall of over 4
percent in brisk turnover.
SoftBank shares have become very sensitive to moves in U.S.
tech stocks ahead of Alibaba's IPO, which is expected to become
one of the largest offerings in history. SoftBank holds around a
37 percent stake in the Chinese e-commerce giant.
Still, stocks were steadier elsewhere in the region in the
wake of a U.S. jobs report that hit the sweet spot for many
investors - firm enough to soothe concerns about the health of
the U.S. recovery but not so strong as to hasten the end of
As a result, MSCI's broadest index of Asia-Pacific shares
outside Japan was off a slim 0.2 percent,
following two weeks of gains.
Indeed, Samsung Electronics dodged the tech
selloff entirely, rising 1 percent ahead of its first-quarter
earnings guidance due early on Tuesday. Markets in China and
Thailand were closed for a holiday.
Profit-taking on high-flying momentum stocks had hit the
Nasdaq hard on Friday and dragged the Dow and S&P off historic
highs. The Nasdaq shed 2.6 percent in its biggest daily
loss since February, while the fell 0.96 percent and the
S&P 500 1.25 percent.
Still, the fall was more a function of positioning than any
weakness in the jobs report.
Nonfarm payrolls rose by 192,000, while upward revisions
over the prior two months totalled 37,000. The unemployment rate
was unchanged at 6.7 percent, while hours worked rebounded and
another soft reading on wages was benign for inflation.
"The conclusion then is that employment conditions are
pretty much the same as they have been last few years," said
Michelle Girard, chief economist at RBS in Connecticut.
"This report should not move the dial in either direction
for either the market or the Fed."
That was just fine for emerging markets which have been
vulnerable to any hint the Federal Reserve might unwind its
stimulus at a faster pace, and so attract foreign funds away.
Emerging market stocks were trading steady on
Monday following three straight weeks of gains.
Also relieved was the U.S. Treasury market where 10-year
yields were at 2.72 percent, after diving 9 basis
points on Friday as prices rallied strongly.
The pullback undermined the U.S. dollar's advantage over the
yen and dragged it back to 103.08 from Friday's 10-week
peak at 104.13 yen.
ECB UNDER PRESSURE
The euro fared even worse after a German newspaper reported
the ECB had modelled the impact of buying a trillion euros of
assets to ward off deflation, a day after the ECB's president
said radical policy action might be needed.
"No longer is it the case that the data need to weaken
further; rather, with the latest inflation data already tracking
below the staff's baseline projections, it will suffice that
there is no 'catch-up' over the next few weeks," said James
Ashley, chief European economist at RBCCM.
"In other words, if the data do not improve as expected, the
ECB will act."
Just the chance of extra action has pushed bond yields down
sharply across Europe, with Spanish five-year yields dropping
below U.S. Treasuries for the first time since 2007.
That in turn undermined the euro, which was pinned at
$1.3699 on Monday having carved out a five-week trough of
$1.3671 on Friday. That helped nudge up the dollar against a
basket of currencies to 80.420.
There is little in the way of major economic data in Asia on
Monday, but the Bank of Japan has a policy meeting ending on
Tuesday that will be closely watched for any hint that
policymakers are considering adding to their already massive
In commodity markets, gold was holding at $1,301.56 an ounce
after bouncing 1.2 percent on Friday.
Oil prices eased after Libyan rebels occupying four eastern
oil ports agreed with the government on Sunday to gradually end
their eight-month petroleum blockade.
Brent crude was quoted 88 cents lower at $105.84 a
barrel on Monday, while U.S. crude eased 41 cents to
$100.73 a barrel.
(Editing by Eric Meijer)