By Chikako Mogi
TOKYO, Jan 8 (Reuters) - Asian shares fell on Tuesday as
investors took a break from the new year's rallies, with caution
setting in ahead of corporate earnings season for the last
quarter of 2012 and the European Central Bank's policy meeting
later in the week.
The euro remained firm against the dollar on speculation the
ECB might refrain from signalling more interest rate cuts when
it meets on Thursday.
The dollar paused from its rapid and sharp rally against the
yen after rising more than 10 percent in less than two months on
speculation the new Japanese government will push for aggressive
monetary easing to beat deflation.
U.S. stock prices retreated from five-year highs on Monday,
spurring selling of oil, gold and other risky investments and
reviving some safety bids for U.S. and German government debt.
U.S. earnings season unofficially kicks off when aluminium
maker Alcoa reports its results after Tuesday's market
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent, after drifting lower the
previous session when investors took profits from the new year
rally, which lifted the index more than 2 percent in the first
week of 2013.
South Korean shares were among the underperformers
with a 0.4 percent drop, despite Samsung Electronics , the world's top maker of memory chips and handsets,
estimating its October-December operating profit at a record 8.8
trillion won ($8.27 billion).
Samsung's guidance, coming ahead of full quarterly results
by Jan. 25, was in line with forecasts. A technical glitch and a
worrying outlook for corporate results cooled investment
'Overall, fourth-quarter earnings are likely to be bad,
except for some tech firms. However, the economy is turning
around, so this is likely to be the worst of it,' Kim
Young-joon, an analyst at SK Securities, said of Seoul shares.
The dollar was down 0.2 percent to 87.60, trimming
Japan's benchmark Nikkei stock average fell 0.5
percent, after snapping a five-session winning streak on Monday
when a pause in the yen's weakness triggered profit-taking on
The euro inched up 0.1 percent to $1.3129.
'Trading for the new year kicked off in full force yesterday
and it is natural for investors to start cautiously with profit
taking from the new year's rally,' said Yuji Saito, director of
foreign exchange at Credit Agricole in Tokyo.
'I expect position adjustments to continue ahead of key
events such as the ECB meeting and earnings reports starting
with Alcoa,' Saito said.
He said the euro could still push higher to around $1.3150
ahead of the ECB meeting.
Saito said the dollar may face selling pressure against the
yen, having scaled its highest since July 2010 at 88.48
on Friday, up about 7 percent over the past month. But he said
support was seen firm at 86.50 yen.
Australia's trade deficit in November widened to its largest
since early 2008 as imports again outpaced exports, though a
recent meteoric rise in the price of iron ore suggests the worst
of the trade pain is over for the resource-rich nation.
China's annual economic growth may have quickened to 7.8
percent in the fourth quarter, a Reuters poll showed, snapping
seven straight quarters of weaker expansion, but the recovery is
likely to be tepid and the economy may need continued policy
support. The data is due out on Jan. 18.
Before the growth data, China will release its trade data on
Thursday, which includes initial estimates for metals imports
A firmer euro and hopes for the Chinese data underpinned
London copper prices, which rose 0.3 percent to $8,096 a
tonne, as China is the world's biggest copper consumer
accounting for 40 percent of refined demand.
'It may be there is a sense that they (metals) have been
oversold in the short term,' said metals analyst Ivan Szpakowski
at Credit Suisse in Singapore, adding that the euro's gains have
also provided added support.
U.S. crude inched up 0.1 percent to $93.30 a barrel
and Brent futures inched up 0.1 percent to $111.50.
(Additional reporting by Somang Yang in Seoul and Melanie
Burton in Melbourne; Editing by Eric Meijer)
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