Private survey on Chinese manufacturing activity ahead

SINGAPORE — Shares in Japan looked set for a lower start on Friday following overnight losses on Wall Street, with investors in Asia-Pacific looking ahead to the release of a private survey on Chinese manufacturing activity in March.

The Nikkei futures contract in Chicago was at 27,630 while its counterpart in Osaka was at 27,570. That compared against the Nikkei 225’s last close at 27,821.43.

The Bank of Japan’s quarterly tankan business sentiment survey is expected at 7:50 a.m. HK/SIN.

Australia’s S&P/ASX 200 shed around 0.1% in morning trade.

Looking ahead, the Caixin/Markit manufacturing Purchasing Managers’ Index is set to be released at 9:45 a.m. HK/SIN.

Data released Thursday showed Chinese factory activity shrinking in March, with the official manufacturing PMI coming in at 49.5, below February’s reading of 50.2. The 50-point mark in PMI readings separates growth from contraction. PMI readings are sequential and represent month-on-month expansion or contraction.

The data comes as China battles its most severe Covid-19 outbreak since the pandemic began.

Overnight stateside, the S&P 500 dropped about 1.57% to 4,530.41. The Dow Jones Industrial Average slipped 550.46 points, or 1.56%, to 34,678.35. The Nasdaq Composite declined 1.54% to 14,220.52.

The losses on Wall Street came as the 2-year and 10-year U.S. Treasury yields briefly inverted for the first time since 2019, a move that is seen as a potential warning signal of recession ahead. The 2-year and 10-year spread was last in negative territory before pandemic lockdowns sent the global economy into a steep recession in early 2020.

The yield on the 2-year Treasury note last sat at 2.3507%, while the 10-year yield was at 2.358%.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.312 following a recent bounce from levels below 98.

The Japanese yen traded at 121.84 per dollar, stronger than levels above 122 seen against the greenback yesterday. The Australian dollar changed hands at $0.7486, off levels around $0.747 seen yesterday.