The dollar hit a one-month high on Friday after an upbeat survey on U.S. business conditions, while Asian technology stocks gained as Samsung Electronics reported a near tripling in quarterly profits. Japanese shares were dragged down by bank shares, which gained earlier this week on a merger plan by two top banks. Oil prices were lower, but within striking distance of a six-week high above $41 a barrel after OPEC confirmed it would push through a planned increase in output quotas without holding a planned ministerial meeting next week. Gold started around 85 U.S. cents lower in Asia and is likely to track movements of the dollar against other currencies ahead of the release of U.S. consumer prices data later in the day. "The market, trying to figure out what will set the tone next, is looking at signs of U.S economic expansion, inflation and prospects for interest rate rises," said Ryohei Muramatsu, general manager of the Asia treasury department at Commerzbank. A two percent rebound in South Korea's Samsung Electronics Co. Ltd. <005930.KS> underpinned Asian tech stocks and helped lift the Seoul market <.KS11> 0.6 percent.. Samsung reported its quarterly profit nearly tripled on strong sales of memory chips and flat screens. Japan's Nikkei stock average <.N225> ended morning trade down 0.46 percent at 11,356.36. Japanese financial markets are closed on Monday for a national holiday.
JAPANESE BANKS FALL
Mitsubishi Tokyo Financial Group (MTFG) <8306.T> dropped 4.35 percent after rising almost 20 percent in the previous two sessions after UFJ Holdings <8307.T>, Japan's fourth-largest bank, said it was seeking a takeover by MTFG. UFJ fell 2.25 percent. An MSCI index of non-Japan Asian shares <.MSCIAPJ> rose 0.22 percent by 0230 GMT, helped by a 0.61 percent rise in its technology component <.MSCIAPJIT>. Benchmark indices rose as much as one percent in Hong Kong <.HSI>, Taiwan <.TWII> and Australia <.AXJO>, but fell half a percent in Singapore <.STI>. The dollar advanced broadly in New York and gained further in Asia as the core producer price index matched market forecasts despite a weak overall index, confirming the view that U.S. growth remains on course and the U.S. Federal Reserve would increase rates moderately. In Asian trade, the dollar rose above 110 yen for the first time since June 17 to as high as 110.05 yen, but then eased to 109.57 yen , slightly below 109.78 yen in late New York trade. The euro, which scored a fresh four-month high of $1.2436 earlier this week, was at $1.2366 versus $1.2351 in late U.S. trade.
Spot gold was at $403.25 an ounce, versus $403.50 in New York on Thursday, when it fell around $1 on the dollar's gain. Crude oil futures were seven cents below the U.S. close of $40.77, after surging more than $1.50 a barrel on Wednesday after weekly data showed an unexpected fall in U.S. crude and gasoline inventories. Japanese government bond (JGB) prices rose in early trading, taking a lead from a dip in stocks, but the market was weighed down by a growing belief that Japan's economic recovery was sustainable. 10-year JGB futures <0#2JGB:> were up 0.19 point at 135.28. The yield on the benchmark 10-year JGB <0#JPTSY=JBTC> was down half a basis point at 1.795 percent. ((For the state of play of Asian stock markets please click on: <0#.INDEXA>))///