Asian Shares, Dollar Sag On Caution Before US Job Data

By Lisa Twaronite

TOKYO (Reuters) -- Asian shares and the dollar slipped in early trading on Friday, after mixed U.S. data provided little clarity on the timing of the Federal Reserve's expected interest rate hike ahead of a key U.S. jobs report later in the session.

China's markets will be closed until Oct. 8 for the National Golden Week holidays. On Thursday, a pair of manufacturing surveys showed persistent weakness in China's factory sector, although they weren't as bad as some had feared.

MSCI's broadest index of Asia-Pacific shares outside Japan was down about 0.3 percent, but still on track for a weekly gain of 0.7 percent, after a mixed performance on Wall Street as markets soaked up a spate of U.S. data ahead of the jobs report.

Japan's Nikkei stock index was down 0.8 percent, poised to shed 1.7 percent for the week.

The Institute for Supply Management (ISM) said its index of national factory activity fell to 50.2, its lowest since May 2013 and just below the median forecast in a Reuters poll.

But separate date suggested the labor market was tightening and U.S. construction spending climbed in August to the highest level since 2008, showing the divergence between the improving domestic economy and overseas weakness and underscoring the Fed's dilemma.

The Fed held off on hiking rates for the first time since 2006 at its meeting last month, citing worries about the global economy, particularly China.

Economists expect the non-farm payrolls report to show that employers added 203,000 jobs in September, according to a Reuters poll. The Labor Department will release the figures at 1230 GMT.

A strong report would be more surprising than a weak one, Kathy Lien, managing director of FX Strategy for BK Asset Management, said in a note to clients.

"A weak number will provide an attractive opportunity to buy USD/JPY lower or sell EUR/USD higher for a move in rates later this year," she said. "The dollar will pop on a strong number and traders should also look to join the move on shallower retraces."

The dollar was buying 119.83 yen, down about 0.1 percent from late U.S. trading, while the euro was slightly lower at $1.1190.

The dollar index, which tracks the greenback against a basket of six rival currencies, was down about 0.1 percent at 96.114, and also down about 0.1 percent for the week.

U.S. crude futures were up about 1.1 percent at $45.23 a barrel, after a choppy session in which traders monitored the unpredictable path of storm Joaquin, and whether it would strike the New Jersey coast and possibly interfere with refineries there.

U.S. crude ended down 0.8 percent on Thursday, after rising as much as 4 percent in the session.

Brent crude was up about 0.8 percent in Asian trading at $48.10 a barrel.

(Editing by Shri Navaratnam)