Asia shares steady, bonds break losing streak

Euro retreats as investors brace for US jobs data

Asian shares got off to a tentative start on Friday while bonds snapped a vicious losing streak and the euro retreated as investors braced for US jobs data and another session of uncertainty over Greece.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed after hitting a nine-week trough. Japan's Nikkei 225 dipped 0.34% while shares in South Korea lost 0.3%.

In the latest Greek twist, Athens delayed a debt payment to the International Monetary Fund and instead chose to bundle four payments into a single 1.6 billion euro lump sum which is now due on June 30.

Greek Prime Minister Alexis Tsipras will put creditors' proposals to parliament from 1500 GMT on Friday, but he has already dubbed the plan "extreme".

Before that likely contentious meeting gets underway, markets are bracing for the latest reading on US jobs. Median forecasts in a Reuters poll are for payrolls to rise 225,000 with the jobless rate steady at 5.4%.

Yet markets only imply a one-in-three chance of a lift off in Fed funds by September, and are not fully priced for a move until December. 

"That September is seen as the first possible tightening by the Fed and there are two meetings before then, detracts significantly from the sensitivity to the data," says Alan Ruskin, head of forex at Deutsche.

"It would probably need a payroll number either side of 150,000 or 250,000 to get the market really excited whereby Fed expectations/probabilities start to change materially."

Caution ahead of the report kept Wall Street on the defensive. The Dow ended Thursday down 0.94%, while the S&P 500 lost 0.86% and the Nasdaq 0.79%.

Declining oil and gold prices also weighed on energy and materials shares, which led declines in the S&P 500.

Global bond yields swung wildly for a third straight session, but did at least end well below their highs. Yields on 10-year German bunds got as far as 0.996% at one stage before rallying all the way to 0.83%.

Likewise, 10-year Treasury yields ended back at 2.309% having been as high as 2.425%.

Treasuries got a boost when the International Monetary Fund downgraded its outlook for the US economy and took the unusual step of cautioning the Fed to wait until the first half of 2016 to start raising interest rates.

Currencies were equally whipsawed, with the euro spiking to $1.1380 at one stage before recoiling to $1.1195 in early Asian trading. The single currency also lapsed to 139.24 yen from a five-month peak of 141.06.

The dollar held at 124.40 yen having bounced between 123.76 and 124.68 in the past couple of sessions. The dollar index, which measures it against a basket of six major currencies, was up 0.3% at 95.761.

In commodity markets, oil was under pressures ahead of an OPEC meeting that is expected to affirm an output target of 30 million barrels per day, ignoring calls from some producers to cut supply and support prices.

Brent crude was flat at $62.03 a barrel on Friday, while US crude futures eased 3 cents to $57.97.