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Hong Kong - Asian shares were mixed on Friday, while the euro sat at a more than one-year low against the dollar after the European Central Bank unveiled another round of measures to fight off deflation.
With the ECB announcement sending investors scurrying out of the euro, the dollar was the main beneficiary, surging to a six-year high against the yen and lifting Japanese exporters.
However, after a broadly healthy run-up this week profit-takers tempered buying sentiment, while Wall Street also provided another soft lead.
Tokyo added 0.17% by lunch and Shanghai gained 0.36%, while Hong Kong lost 0.11%, Sydney shed 0.23% and Seoul gave up 0.18%.
After a closely watched meeting, ECB policymakers on Thursday cut interest rates to 0.05% from 0.15%. They also cut the deposit rate to minus 0.2% from minus 0.1%, meaning lenders would have to pay more to keep their cash at the central bank.
The move is aimed at boosting lending to businesses and consumers in order to kick-start the economy and fend off deflation.
ECB chief Mario Draghi also unveiled plans to buy asset-backed securities to help kick-start lending in the region, as well as a programme to purchase covered bonds.
This is a technique for buying certain types of assets out of bank balance sheets and replacing them with cash, in the hope it will be passed on in the form of loans. However, the bank stopped short of buying government debt, like the US Federal Reserve does in its quantitative easing programme.
The decision showed the bank's leaders understood that "they were running out of time", said Boris Schlossberg, managing director at BK Asset Management.
"They realised that the situation is pretty severe," he added. "They simply can not do nothing, they have to do some kind of reaction to stimulate demand."
Dollar rallies against yen
The news immediately hit the euro, which sank below $1.30 on Thursday for the first time since July 2013. It ended the day in New York at $1.2945. However, it slipped further in Tokyo on Friday, buying $1.2926.
It also fetched ¥136.44, down from ¥136.22 in New York and well down from the ¥137.85 earlier on Thursday in Asia.
Euro-aversion had a knock-on effect for the dollar, which jumped to ¥105.69 in Asia on Friday, its highest level since October 2008 before edging back to ¥105.38 in the late morning.
Adding to dollar strength is the expectation the Fed will bring forward an interest rate hike as the US economy picks up pace, while Bank of Japan chiefs consider further easing measures as they struggle with tepid growth.
Eyes are now on the release of US jobs data later on Friday, which could have a bearing on Fed policy.
On Wall Street the three main indices ended lower, despite the more accommodative policy from the ECB.
The Dow eased 0.05%, while the S&P 500 slipped 0.15% and the Nasdaq lost 0.22%.
Oil prices were mixed. US benchmark West Texas Intermediate for October delivery rose seven cents to $94.52 while Brent crude for October delivery eased three cents to $101.80.
Gold traded at $1 263.62 an ounce at 04:30, from $1 269.92 late on Thursday.
