ASIA MARKETS: Asia Stocks Head For Downbeat End To Week

By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) -- Asia stocks lost ground Friday, with the Japanese market dented by a stronger yen, and with earnings working to depress Australian shares.

Japan's Nikkei Stock Average declined 0.6%, South Korea's Kospi traded fractionally lower, and Australia's S&P/ASX 200 index lost 0.2%.

The action followed a lackluster U.S. lead, as Wall Street held in a tight range overnight, and the Dow Jones Industrial Average (DJI) posted another marginal loss

While U.S. jobless claims surprised positively Thursday, international economic news remained bleak, with data showing gross domestic product in the 17-nation euro zone contracted by 0.6% during the fourth quarter.

A stronger yen weighed on Japanese shares, with the dollar slipping below the Yen93 level overnight, and BNP Paribas currency strategists noting the greenback's move to the bottom of its recent range ahead of a meeting of the Group of 20 major economies.

"Markets remain alert to G-7/G-20 headlines," the BNP Paribas said.

The delegates from the overlapping G-20 and Group of Seven blocs are due to meet later in the day in Russia, and may make some references to Japan's recent aggressive measures to weaken its currency.

A stronger yen tends to depress investor appetite for Japanese companies that make a significant portion of their profit overseas.

Currency-sensitive auto stocks were among the worst performers Friday in Tokyo, with Mazda Motor Corp. (7261.TO) down 4%, and Subaru maker Fuji Heavy Industries Ltd. (FUJHY) losing 3.3%.

Technology exporters' losses included a 2.3% drop for Casio Computer Co. (CSIOY) and a 3% loss for Panasonic Corp. (PC)

Shares of Sony Corp. (SNE) surrendered 3.2%, also weighed by a drop in U.S. January videogame-console and software sales, according to NPD Group. Sony is widely expected to unveil its new gaming console at an event Feb. 20.

In the metals sector, Nippon Steel & Sumitomo Metal Corp. failed to get a bump from a solid profit in its first earnings as a merged company, as its shares lost 3.1%.

Other steel firms likewise dropped, with Kobe Steel Ltd. losing 4.7%, and Sumitomo Metal Metal Mining Co. (5713.TO). down 3.7%. While a stronger yen cuts input prices for Japanese steel mills, they generally favor a weaker yen due to their strong export business.

Also trading lower after posting earnings, Trend Micro Inc. (TMICY) lost 8.4%, while Kirin Holdings Co. (KNBWY) fell 6.8% after a recent run-up in the stock, even as the Japanese brewer posted a sharp gain in full-year profit.

In Australia, banking group Australia & New Zealand Banking Group Ltd. (ANEWF) declined 0.8% after the lender reported a 20% drop in first-quarter net profit amid soft economic conditions.

Miners were the worst performers by sector, with Rio Tinto Ltd. (RIO) weighing as it traded 2.6% lower after posting a fiscal-year loss late Thursday.

Rival BHP Billiton Ltd. (BHP) fell 0.7%.

Steel giant Posco (PKX) advanced in South Korea, however, while Samsung Electronics Inc. (SSNLF) inched up 0.1%.

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