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Asian Stocks Follow Wall Street Lower Ahead of U.S. Job Data

Investing.com - Asian stocks fell in morning trade on Friday after U.S. markets closed lower overnight as Investors continued to digest comments by Federal Reserve Chairman Jerome Powell.

Hong Kong’s Hang Seng Index slipped 0.3% by 10:40 PM ET (02:40 GMT).

South Korea’s KOSPI dropped 0.6%.

Down under, Australia’s ASX 200 was largely unchanged at 6,350. Macquarie Group slumped almost 6% after the company said profit would drop in 2019.

Trade volume remained thin in Asia as markets in Japan and China are closed for holidays.

On Wednesday, the Federal Open Market Committee left its overnight funds rate in a range of 2.25% to 2.5% as expected.

Federal Reserve Chairman Jerome Powell played down recent weakness in U.S. inflation, which retreated further from the Fed’s 2% target, as possibly “transitory.” Powell told reporters that the policy stance is “appropriate right now” and “we don’t see a strong case for moving in either direction.”

Powell’s comments sparked a sudden sell-off in the U.S., with the Dow closing more than 150 points lower on Thursday.

Market sentiment also took a hit this week after weak manufacturing data coming out from China and the U.S. signalled global growth remains fragile.

Looking ahead, investors’ focus will be on the U.S. non-farm payrolls due later in the day.

“Payrolls tonight are expected (to) reveal still robust levels of payrolls growth (190K) but there’ll be more than one eye on what the report says about average earnings growth that’s expected to grow a meagre 0.1%,” David de Garis, a director and senior economist at National Australia Bank, wrote in a morning note that was cited by CNBC.

Traders are also closely monitoring developments on the Sino-U.S. front. Chinese Vice Premier Liu He will lead a 100-member delegation to Washington next week.

Citing people familiar with the discussion, Bloomberg said “difficult issues remain unresolved,” just one day after CNBC said a trade deal might be announced by next Friday.

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