Stock markets in Asia are on the retreat Friday, following a decline in the U.S. markets overnight, but trading volume is low ahead of a key unemployment report from the U.S. later in the day.

Shares in Japan are leading the decline, with the Nikkei 225 down 2.4% to 13,0064.04 recently amid disappointment over recent earnings there.

“Investor mood was soured not just by bleak outlook for the U.S. economy, but also by poor Japanese corporate earnings,” said Yoshinori Nagano, senior strategist at Daiwa Asset Management.

In particular, two of Japan’s major banks, Mizuho Financial Group and Sumitomo Mitsui Financial Group reported lackluster results. Shares of Mizuho were recently down 3.8%, while Sumitomo’s stock was off 8.5%.

Also down sharply after earnings reports are Sharp, which is off 5%, and NEC, which has dropped 15.3%.

Elsewhere, Hong Kong’s Hang Seng Index is down 2% to 22,283.66, Australia’s S&P/ASX 200 is down 2% to 4,896.5, and Korea’s Kospi is down 1.7% to 1,567.30.

Taiwan’s TAIEX index is off 0.6% to 6,978.82, and Singapore’s Straits Times Index is off 1.3% to 2,890.36.

In New Zealand, the NZX-50 is down 1.2%, at 3,297.64 weighed by news AMP Capital Investors, New Zealand’s largest fund manager, froze around NZ$419 million of investors’ cash from one of its property funds, becoming yet another casualty of the global credit crisis and a deepening slowdown in the domestic economy.

Traders around the region are pointing to a weaker-than-expected report on U.S. economic growth, as well as the largest tally of jobless claims in the country since 2003.

“What we have here is another nasty surprise from the U.S. to cause the whole bloody market to tumble down,” said a trader in Singapore.

The U.S. Commerce Department said gross domestic product rose 1.9% in the second quarter, a faster pace than the quarter before but below expectations. Also the number of U.S. workers filing new claims for unemployment jumped to a five-year high last week.

Adding to economic jitters, former Federal Reserve Chairman Alan Greenspan said the U.S. is on the brink of recession and advocated nationalizing Freddie Mac and Fannie Mae, saying they were “an accident waiting to happen.”

The Dow Jones Industrial Average fell 205.67 points, or 1.8%, to 11378.02.

Traders across Asia are now waiting to hear about U.S. nonfarm payrolls later Friday. Economists surveyed by Dow Jones Newswires are looking for a drop of 65,000 in nonfarm payrolls this month after the previous month’s 62,000 loss. The jobless rate is seen ticking up to 5.6% from 5.5% previously.

“The payrolls data is always a bit of a toss of the coin,” said a gold trader. Spot gold was recently down $2.55 per ounce from its New York close, trading at $910.75.

Similarly, trading in foreign exchange markets is hesitant ahead of the report. The dollar was recently at Y107.61 down from Y107.85 seen on Thursday afternoon in New York trading.

The euro was recently at $1.5559, not far off of its level of $1.5598 in New York trading.

Crude was also near its New York trading close, with Nymex light sweet crude futures for September delivery recently down 38 cents a barrel at $123.70 on Globex.

Source: http://www.djnewswires.com/eu

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