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Yuan Slides, Dollar Steadies With Asia Shares Mixed

PBOC strengthens yuan fixing by most since July 2005 while Tokyo stocks fall, Hong Kong rises before U.S. jobs report

China’s yuan pared its record weekly rally after the currency fixing was strengthened less than analysts expected, while Mexico’s peso climbed as the central bank sold dollars. Asian stocks were mixed ahead of the monthly U.S. jobs report.

The yen, euro and British pound all weakened for the first time in three days and the Turkish lira extended its decline. The MSCI Asia Pacific Index was headed for its best start to a year since 2010 and emerging markets rose for a fourth straight day. Samsung Electronics Co. shares climbed 1.8 percent in Seoul after profit beat estimates as it bounced back from the death of its fire-prone Galaxy Note 7. The three-month interbank lending rate for the offshore yuan rose to a record high in Hong Kong.

China is risking eroding confidence in its currency by repeatedly tightening capital controls, according to hedge-fund manager Benjamin Fuchs. While the stock rally and Treasury rout that greeted Donald Trump’s win have been under threat for the past month, the dollar stabilized Friday after a two-day tumble. The U.S. jobs report is expected to confirm a sixth straight year with more than 2 million jobs added, a pace that could be difficult to sustain.

Currencies

The offshore yuan lost 0.4 percent after a four-day climb. The onshore yuan also fell 0.4 percent.

The euro declined 0.2 percent to 1.0586 per dollar and the pound was down 0.3 percent at 1.2383.

The Bloomberg Dollar Spot Index rose 0.1 percent after falling 1 percent Thursday in its biggest slide since July on a closing basis. Companies added fewer jobs than forecast in December, according to a private research group.

The yen fell 0.4 percent to 115.84 per dollar after strengthening 1.7 percent Thursday. The Aussie and kiwi dropped 0.3 percent and 0.1 percent, respectively. South Korea’s won lost 0.4 percent.

Mexico’s peso jumped 0.5 percent after Banxico sold dollars to bolster the exchange-rate. The currency Thursday erased an advance of 1.5 percent after Trump threatened Toyota Motor Corp. with a border tax for planning to build a factory in Mexico.

The Turkish lira was down 0.7 percent at a record low 3.6192 per dollar following a 0.6 percent drop the previous day.

Stocks

The MSCI Asia Pacific Index slipped 0.2 percent as of 3:17 p.m. in Tokyo. Japan’s Topix Index fell 0.2 percent, though gainers outnumbered losers 996 to 859 on the gauge.

Hong Kong’s Hang Seng rose 0.2 percent and Australia’s S&P/ASX 200 Index was little changed. South Korea’s Kospi advanced 0.4 percent as Samsung climbed. Singapore’s Straits Times Index rose 0.2 percent.

Futures on the S&P 500 Index were little changed after the underlying gauge fell 0.1 percent Thursday, just below its record set on Dec. 13.

The Shanghai Composite slid 0.2 percent, while Taiwan’s Taiex index rose 0.2 percent, gaining for the fifth straight day. India’s Sensex Index was down 0.1 percent after climbing 0.4 percent earlier.

The MSCI Emerging Markets Index extended gains for a fourth day, rising 0.1 percent. The benchmark index in the Philippines rose 0.9 percent to bring its weekly gain to 6.3 percent.

Commodities

Crude was down 0.3 percent at $53.62 a barrel after climbing 0.9 percent Thursday following a report that Saudi Arabia is cutting production as it implements an agreement to ease a global supply glut sparked the turnaround.

Gold retreated 0.3 percent to $1,176.58 per ounce after a three-day, 2.9 percent climb.

Bonds

Australian bonds climbed, sending 10-year yields down five basis points to 2.69 percent, a level last seen in November; similar New Zealand rates dropped five basis points to 3.19 percent.

U.S. Treasuries rallied Thursday by the most since the post-Brexit jolt, with the yield on the 10-year benchmark falling nine basis points to 2.34 percent. That was the biggest drop since June 27.

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