As rising evidence of a U.S. slowdown fueled fears of a worldwide recession, Asian markets and U.S. equity futures fell on Thursday, while bonds, the safe-haven U.S. dollar, and the Japanese yen were bid.
After recent high gains and many global markets closed on Good Friday, when potentially critical U.S. monthly payroll data is due, investors were likely to remove capital from the market.
Chinese blue chips fell 0.27 per cent. The Hang Seng in Hong Kong was relatively unchanged, but technology stocks on the index fell 0.8%.
Japan's Nikkei fell almost 1%, contributing to a 0.8% decline in MSCI's broadest Asia-Pacific stock index. Since mid-March, the Asia-wide index has increased by more than 5%, reaching a 1-and-a-half-month high on Tuesday.
South Korea's Kospi fell 0.6%, while Australia's share index fell approximately 0.3%.
Futures for the U.S. Nasdaq E-mini indicated a 0.45% decline at the open after the benchmark tech stock index fell 1% overnight. S&P 500 E-mini futures predicted a 0.24 per cent decrease at the opening, extending Wednesday's 0.25 per cent down.
Employers in the private sector of the United States hired much fewer people than anticipated in March, adding to evidence of a tightening labour market from earlier in the week.
The country's manufacturing sector also slowed more than anticipated, while the services sector slowed more.
"Cracks have started to appear in the U.S. economic data this week, and slowdown fears are re-emerging," IG analyst Tony Sycamore wrote in a client note. This prompted investors to sell risky assets and transfer them to safer investments, such as Treasuries and the dollar.
"It makes sense to square some risk ahead of the Easter long weekend," he said. Now, all eyes are on Friday's release of nonfarm payrolls.
As this week progressed, indications of a dramatic U.S. economic slowdown increased, and markets began pricing in a more dovish Fed. According to the money markets, the probability of another quarter-point boost at the May meeting vs a halt is currently a coin toss. And 71 basis points of easing are expected by the end of the year.
As a result, Treasury yields have decreased. In Tokyo, the yield on 10-year notes hovered around 3.30 per cent, remaining close to the nearly seven-month low of 3.26 per cent reached overnight.
This helped the yen, highly sensitive to U.S. yields, gain ground against the greenback, another safe-haven currency.
The dollar fell 0.13 per cent to 131.15 yen but was more robust against most other currencies. Continuing its rebound from a two-month low, the dollar index increased 0.12% to 101.99.
Each risk-sensitive, commodity-linked Australian and New Zealand dollar lost roughly 0.3% against the U.S. dollar. The euro fell 0.16 per cent to $1.0891.
West Texas Intermediate was down 57 cents to $80.04 per barrel, and Brent was down 61 cents to $84.38 per barrel.
