LONDON (AP) — Financial markets outside of Japan were lackluster Friday at the end of a week that's seen the S&P 500 and Germany's DAX post record highs and the dollar fall to near two-year lows against the euro.
In Tokyo, the benchmark Nikkei index slid 2.8 percent to 14,088.19 as the dollar fell below its 200-day average of 97.30 yen. A higher yen makes Japanese exports potentially more expensive in international markets and that could hurt growth as well as Prime Minister Shinzo Abe's strategy to reverse two decades of economic stagnation and falling prices.
"We certainly get the sense that the market enthusiasm over 'Abenomics' is waning," said Derek Halpenny, an analyst at Bank of Tokyo-Mitsubishi UFJ.
Elsewhere, investors were largely consolidating recent gains.
In Europe, the FTSE 100 index of leading British shares was flat at 6,714, little affected by news that the British economy grew at a quarterly rate of 0.8 percent in the third quarter. Though that was the highest quarterly rate for over 3 years, it was in line with expectations.
Elsewhere in Europe, Germany's DAX was 0.1 percent lower at 8,975, having earlier risen to an all-time high of 9,010.65, which was the first time it has ever breached the 9,000 mark. The CAC-40 in France was 0.4 percent lower at 4,261.
In the U.S., the Dow Jones industrial average was up 0.1 percent at 15,527 while the broader S&P 500 index rose the same rate to 1,754. Strong earnings from the likes of Microsoft and Amazon did little to alter the prevailing flat mood.
Now that the uncertainty over the raising of the U.S. debt ceiling has been resolved, albeit only until early next year, investors have focused on other matters, notably when the Federal Reserve will start to reduce its monetary stimulus.
Figures this week — some of which were delayed by the partial government shutdown in the U.S. — have reinforced expectations that so-called "tapering" won't begin until next year. In particular, worse than expected payrolls figures for September helped shore up confidence in stock markets and sent the dollar skidding — the Fed's stimulus effectively creates more dollars, which are then recycled in financial markets.
The dollar was also flat-footed at the end of a week that saw the euro clamber above $1.38 for the first time since November 2011. Europe's single currency was steady Friday at $1.3800 while the dollar fell 0.1 percent to 97.32 yen.
Earlier in Asia, Seoul's Kospi slipped 0.6 percent to 2,034.39 while Hong Kong's Hang Seng fell 0.6 percent to 22,698.34 and China's Shanghai Composite Index was off 1.5 percent at 2,132.96.