* Solid global economy underpins world shares
* Lack of Trump policy details undermine dollar
* Yuan flat after Trump calls China "grand champions" of FX
* European stocks seen down slightly
By Hideyuki Sano
TOKYO, Feb 24 Asian shares took a breather on
Friday, slipping from 1-1/2-year highs as material shares were
hit by sudden falls in copper and other commodity prices while
investors assessed Washington's stance on tax and currency
MSCI's broadest index of Asia-Pacific shares outside Japan
was down 0.5 percent, giving back part of this
week's gains, though it is likely to log its fifth straight
Material and resource shares were the biggest drag as they
were spooked by big falls in the price of copper, iron
ore and other commodities.
Hong Kong's Hang Seng dropped 0.5 percent, as did
Japan's yen-sensitive Nikkei. China's mainland shares
European shares are expected to be soft, with spread-betters
looking to falls of up to 0.1 percent in major European indexes
such as Germany's DAX and Britain's FTSE.
On Wall Street, the Dow managed to notch a record
high for a tenth straight session, the longest sequence of
record setting since 1987. It was also the longest streak of
gains for the index since March 2013.
But U.S. retail stocks fell 1.0 percent, plunging
late in the session. U.S. President Donald Trump spoke
favourably about an export-boosting border adjustment tax being
pushed by Republicans in the U.S. Congress, a measure strongly
opposed by retailers.
Construction firms also fell 1.7 percent, which
some attributed to speculation of delay in infrastructure
Treasury Secretary Steven Mnuchin said on Thursday he saw
limited impact from the new administration's policies in 2017.
Since the U.S. election, traders have bet on tax cuts, less
regulation and more infrastructure spending from Trump and the
Republican-controlled Congress to bolster the U.S. economy.
"There are strong expectations on tax cuts in the U.S.
markets. On the other hand, the chance of a Fed rate hike in
March seems limited, which is also helping shares," said
Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset
Mnuchin also laid out an ambitious schedule to enact tax
relief for the middle class and businesses by August, but added
the Trump administration was still studying a border tax.
As Trump has promised a "phenomenal" plan by early March to
cut business taxes, many investors expect more clarity when he
delivers a speech to Congress on Tuesday.
Wednesday's Federal Reserve minutes, which showed that there
was less urgency among voting members to raise interest rates,
have helped to drive down U.S. Treasury yields and the dollar.
The yield on 10-year U.S. Treasuries hit a two-week low of
The dollar slipped to 112.55 yen, also a two-week
low, on Thursday and last stood at 112.79 yen.
The euro fetched $1.0584, off Wednesday's six-week
low of $1.0494.
Trump also called China "grand champions" of currency
manipulation in an interview with Reuters, doing little to raise
confidence on trade relations between the world's two biggest
Markets appeared to take his comments in stride, as they
were made just hours after his new Treasury secretary pledged a
more methodical approach to analysing Beijing's foreign exchange
"It’s politics versus reality. The Treasury has highlighted
very clearly and has a very longstanding policy of the framework
and the three rationales for naming someone a currency
manipulator," said Josh Crabb, head of Asian equities at Old
Mutual Global Investors in Hong Kong.
"At the end of the day Trump can say what he wants. This is
not an economy where the President actually has that much power.
He’s subject to the House and the Senate and also the Judiciary.
There’s politics to be played. And the Chinese, they get this,”
The offshore yuan stood little changed at 6.8535 per dollar
. The yuan was emerging Asia's worst performer last
year, even as Beijing tried to stem its fall, sliding around 6.6
percent in its biggest drop in over 20 years onshore.
Other Asian currencies edged up against a broadly weak
dollar, with the Korean won hitting a four-month high.
Oil prices held gains on data showing U.S. stockpiles rose
for a seventh straight week but at a pace that was well below
expectations. News of oil being sold out of storage in Southeast
Asia also supported the market.
U.S. West Texas Intermediate was unchanged at $54.41
a barrel. WTI was on track for a weekly gain of about 1.8
percent, which would be its biggest so far this year.
Brent crude was also little moved at $56.57 and was
on track for a weekly gain of about 1.2 percent.
(Additional reporting by Nichola Saminather in Singapore,;
Editing by Jacqueline Wong and Simon Cameron-Moore)