Asian shares slip as Japan 'tankan' shows weaker outlook

Asian shares slip as Japan 'tankan' shows weaker outlook

Asian shares have mostly fallen as a resurgence of Russian attacks dashed hopes for any quick end to the war in Ukraine

By YURI KAGEYAMA AP Business Writer

April 1, 2022, 4:17 AM

• 5 min read

In this photo provided by the New York Stock Exchange, a pair of traders work on the floor, Thursday, March 31, 2022. Stocks edged lower in midday trading on Wall Street Thursday and oil prices fell as President Joe Biden ordered the release of up to 1 million barrels of oil per day from the nation's strategic petroleum reserve. (Courtney Crow/New York Stock Exchange via AP)

TOKYO -- Asian shares were mostly lower Friday as a resurgence of Russian attacks dashed hopes for any quick end to the war in Ukraine.

The retreat followed a broad decline on Wall Street, which closed out its worst quarter since the pandemic broke out two years ago.

A closely watched quarterly gauge of business sector sentiment in Japan called the “tankan,” carried out by the Bank of Japan, found the benchmark indicator for large manufacturers dropped for the first time in seven quarters, losing three points from a survey in December to 14 points from 17 points.

The war in Ukraine, coming on top of supply chain disruptions at top manufacturers caused by COVID-19 restrictions and growing worries about inflation, especially soaring energy costs, are clouding the outlook for already fragile growth in the world's third largest economy.

The war is the biggest single factor weighing on markets, analysts say. Ukrainian President Volodymyr Zelenskyy expressed pessimism about Russian intentions and said in his nightly video address to the nation that he expected the Russian offensive would continue for some time.

“As we head into the weekend break, optimism for a ceasefire in the geopolitical conflict continues to fade overnight,” said Yeap Jun Rong, market strategist at IG in Singapore.

Japan’s benchmark Nikkei 225 slipped 0.7% in morning trading to 27,618.27.

Shares in electronics and energy giant Toshiba Corp. jumped 6.7% on news that Bain Capital might make an offer to acquire the company and take it private. Toshiba said it was not involved in any such talks.

South Korea’s Kospi lost 0.6% to 2,741.79. Australia’s S&P/ASX 200 edged up 0.1% to 7,507.50. Hong Kong’s Hang Seng shed 0.8% to 21,818.42, while the Shanghai Composite added 0.9% to 3,280.20.

Rising COVID cases in China are adding to the worries of a regional slowdown. The lockdown in Shanghai entered its second phase of extended restrictions, while restrictions were lifted in hard hit Jilin.

On Wall Street, a 3.6% gain for March failed to offset a dismal January and February that left U.S. indexes lower for the year to date.

The S&P 500 lost 1.6% to 4,530.41. Its loss since the beginning of the year is 4.9%. The Dow Jones Industrial Average also fell 1.6%, to 34,678.35. The Nasdaq composite fell 1.5% to 14,220.52. Both indexes also notched gains for March, thanks largely to a market rally in the two weeks heading into this week.

The Russell 2000 index dropped 20.94 points, or 1%, to 2,070.13.

Oil prices fell as President Joe Biden ordered the release of up to 1 million barrels of oil per day from the nation’s strategic petroleum reserve. The move to pump more oil into the market is part of an effort to control energy prices, which are up nearly 40% globally this year.

U.S. benchmark crude fell 36 cents to $99.92 a barrel early Friday. It fell 7% on Thursday. Brent, the international standard, shed 7 cents to $104.64 a barrel.

An overnight pullback slightly trimmed what have been soaring oil prices amid Russia's invasion of Ukraine. The conflict has elevated concerns that tightened supplies will only worsen persistently rising inflation that threatens businesses and consumers globally.

An inflation gauge that is closely monitored by the U.S. Federal Reserve jumped 6.4% in February compared with a year ago, marking the largest year-over-year rise since January 1982.