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Asia markets open lower, following US losses

CNBC logo CNBC 22-07-2016 Saheli Roy Choudhury

Asia markets opened lower on Friday, following losses in the U.S. as oil prices weighed and the market consolidated ahead of next week's Fed meeting. 

Australia's benchmark ASX 200 (.AXJO) was down 0.11 percent, with the energy sector dropping 0.61 percent in early trade. In South Korea, the Kospi (.KS11) was down 0.16 percent.

The Nikkei 225 (.N225) in Japan was down 0.93 percent, with stocks likely under pressure from a relatively stronger yen.

The Japanese yen (OSEJPY=) strengthened against the dollar overnight, with the currency pair trading at 105.79 on Friday morning, compared to levels near 107.15 traded on Thursday afternoon local time and near 100 two weeks earlier.

The spike in the yen came after Bank of Japan (8301.T-JP) governor Haruhiko Kuroda, in a BBC interview broadcast on Thursday, ruled out the possibility of "helicopter money" - the colloquial name for "money-financed fiscal programs" - to tackle deflation in Japan, amid building expectations that policymakers were gearing up to introduce more stimulus. The date the interview was conducted was not immediately clear.

"The fact we've only seen a modest recovery in the [currency] pair suggests trader see very little appetite for this uber-unconventional policy change and we should see the Nikkei open on the back foot today," said Chris Weston, chief market strategist at brokerage IG.

Previously, Japan's Kyodo News reported that the Japanese government was compiling a stimulus package of at least 20 trillion yen ($188 billion) to help the domestic economy emerge from deflation, and to fend off possible adverse effects from Brexit. The report cited sources close to the matter.

Oil prices fell on Thursday on the back of growing inventories of gasoline and other oil products, Reuters reported.

U.S crude futures settled down $1, or 2.2 percent, at $44.75 a barrel, while global benchmark Brent closed 97 cents, or 2.1 percent, lower at $46.20. 

Elsewhere, the dollar (=USD) dropped from the 97 handle to trade at 96.873 against a basket of currencies, trading lower against major currency pairs. Experts attributed the lag to "falling stocks and declining yields" stateside.

In company news, shares of Samsung Electronics (593'A-KR) dropped 2.01 percent in early trade. Reuters reported before market open that the consumer electronics maker had sued Chinese technology company Huawei Technologies for patent infringements, with filings in multiple courts in China.

The move escalated an ongoing legal conflict between the two. Huawei, in May, said it sued Samsung in the U.S. and China, accusing the South Korean company of patent infringement for fourth-generation cellular communications technology, Reuters reported.

In Europe, stocks finished near flat after the European Central Bank (ECB) left its key interest rate unchanged.

The ECB left its benchmark refinancing rate at 0 percent and its interest rate on deposit facility remained at negative 0.4 percent.

The bank was widely expected to preserve its zero interest-rate policy, but the market expects further monetary policy stimulus further down the line from global central banks.

US indexes closed lower on Thursday, with the Dow Jones industrial average (.DJI)snapping a nine-day winning streak to close down 77.80 points, or 0.42 percent, at 18,517.23. The S&P 500 (.SPX) index slipped 7.85 points, or 0.36 percent, to 2,165.17, and the Nasdaq (.IXIC) composite was lower by 16.02 points, or 0.31 percent, to 5,073.90.

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