HONG KONG, Aug 17, 2010 (AFP) - A fresh batch of downbeat data from the United States was tempered by mild bargain hunting in Asian stock trading on Tuesday amid rising concerns about the global recovery.
Confidence was dealt a blow on Monday after Japan announced its economy grew at a weaker-than-expected pace in the second quarter as its key export sector was hit by easing demand.
Hong Kong was 0.30 percent lower in the morning, Tokyo sank 0.74 percent by the break and Singapore was flat, while Sydney edged up 0.38 percent and Shanghai rose 0.16 percent.
A survey by the Federal Reserve Bank of New York released Monday showed that although business conditions slightly improved in August for New York manufacturers, the new orders and shipments indexes fell below zero for the first time in more than a year.
The monthly Empire State manufacturing survey is conducted among 175 manufacturers in the state.
"This data set had a particular sting about it because it's been the manufacturing sector that has held the economy up thus far," David Taylor, market analyst at CMC Markets in Sydney, told Dow Jones Newswires.
"The numbers point to economic weakness now filtering throughout the economy."
The announcement added to the gloom from data showing Japan's gross domestic product grew just 0.1 percent in the three months to June on a quarterly basis because of cooling exports and flat domestic consumption.
The figures also suggest that China is set to become the world's second biggest economy after it outpaced Japan in the three months in nominal terms.
Japan's Nikkei was also hit by the strengthening yen, which weighs on exporters, as cautious traders move into safer currencies in times of trouble.
The dollar eased to 85.26 yen in Tokyo morning trade, from 85.34 yen late Monday in New York. The euro edged up to 1.2847 dollars, compared with 1.2822, and to 109.53 yen from 109.43.
The dollar also fell on news that China's ownership of US government debt has dropped to the lowest level in at least a year in a sign Beijing is moving to diversify out of US bonds.
Beijing is reportedly turning bullish on Europe and Japan at the expense of the United States.
Some dealers suggest the greenback could continue to slide, below its all-time low of 79.75 yen, as investors stay focused on the uncertain US economic growth.
Market-watchers are keeping an eye on possible moves by Japanese authorities to slow the rise of the yen. Prime Minister Naoto Kan is planning to meet Bank of Japan Governor Masaaki Shirakawa next Monday, according to reports.
Oil prices were up. New York's main contract, light sweet crude for September delivery, was up 12 cents to 75.36 dollars a barrel in morning Asian trade.
Brent North Sea crude for delivery in October added four cents to 75.67 dollars.
Gold extended recent gains, opening at 1,223.00-1,224.00 US dollars an ounce, up from Monday's closing price of 1,218.50-1,219.50 dollars as the precious metal is also considered a safe haven as markets slip.
