ASIA MARKETS: Asia Stocks Head For Downbeat End To Solid Week

By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) -- Asia stocks lost ground Friday, with the Japanese market dented by a stronger yen, and earnings working to depress Australian shares, while Hong Kong came under some pressure from weak European data.

Japan's Nikkei Stock Average declined 1.1%, while South Korea's Kospi and Australia's S&P/ASX 200 index traded fractionally lower.

Hong Kong's Hang Seng Index slipped 0.2%, while Mainland Chinese markets remained closed all week for a holiday.

The Nikkei Average was showing a week-to-date gain of 0.3% while Sydney's S&P/ASX 200 was up 1.3%, the Kospi was higher by 1.6%, and the Hang Seng Index was up 0.6%.

Friday's action followed a lackluster U.S. lead, as Wall Street held in a tight range Thursday.

While U.S. jobless claims surprised positively, international economic news remained bleak, with data showing gross domestic product in the 17-nation euro zone contracted by 0.6% during the fourth quarter.

In Hong Kong, globally exposed ports operator Cosco Pacific Ltd. (>> COSCO PAC ADR) fell 1.1%, while Europe-exposed apparel firm Esprit Holdings Ltd. (>> Esprit Holdings Limited) fell 0.6%.

Banking giant HSBC Holdings PLC (>> HSBC Holdings plc), which is based in London and has significant operations across Europe, fell 0.5%.

Hong Kong-listed property companies were losing ground as well, with Wharf Holdings Ltd. (>> WHARFHLDG ADR) down 1.5% and Cheung Kong Holdings Ltd. (>> Cheung Kong (Holdings) Limited) losing 0.9%.

Yen in focus ahead of G-7

Delegates from the overlapping Group of 20 and Group of Seven blocs of major economies were due to meet later Friday in Moscow, and may make some references to Japan's recent aggressive measures to weaken its currency.

Those actions have included strong rhetoric on the yen's level and the setting of a formal 2% inflation target, as well as a commitment to open-ended asset purchases from next year.

Earlier in the week a joint G-7 statement sparked a bought of volatility in the yen. The dollar slipped below the Yen93 level overnight as "markets remain alert to G-7/G-20 headlines," according to currency strategists at BNP Paribas.

A stronger yen tends to depress investor appetite for Japanese companies that make a significant portion of their profit overseas.

Currency-sensitive auto stocks were among the worst performers Friday in Tokyo, with Mazda Motor Corp. (>> Mazda Motor Corporation) down 5.5%, and Subaru maker Fuji Heavy Industries Ltd. (>> Fuji Heavy Industries Ltd.) losing 4.3%.

Technology exporters' losses included a 2.7% drop for Casio Computer Co. (>> Casio Computer Co Ltd) and a 3% loss for Panasonic Corp. (>> Panasonic Corporation)

Shares of Sony Corp. (>> SONY CORPORATION) fell 4%. U.S. videogame-console and software sales dropped in January, according to NPD Group. Sony is widely expected to unveil its new gaming console at an event Feb. 20.

In the metals sector, Nippon Steel & Sumitomo Metal Corp. declined 3.9%, after it posted a quarterly profit but released a weaker-than-expected earnings forecast for its fiscal year on Thursday.

Other steel firms likewise dropped, with Kobe Steel Ltd. losing 6.3%, and Sumitomo Metal Mining Co. (>> Sumitomo Metal Mining Co., Ltd.) down 4.2%.

Also trading lower after posting earnings, Trend Micro Inc. (>> Trend Micro Incorporated (ADR)) lost 8%. Kirin Holdings Co. (>> Kirin Holdings Company, Limited.) fell 4.9% after the Japanese brewer posted a sharp gain in full-year profit but said 2013 pretax profit will likely fall 5% on sales promotion costs, according to a Nikkei news report.

In Australia, banking group Australia & New Zealand Banking Group Ltd. (>> Australia and New Zealand Banking Group) declined 0.6% after the lender reported a 20% drop in first-quarter net profit amid soft economic conditions.

Miners were the worst performers by sector, with Rio Tinto Ltd. (>> Rio Tinto plc) weighing on the market as it traded 2.3% lower after posting a fiscal-year loss late Thursday.

Rival BHP Billiton Ltd. (>> BHP Billiton Limited) fell 0.6%.

In South Korea, steel giant Posco (>> POSCO) advanced 0.1%, while Samsung Electronics Inc. (>> Samsung Electronics Co., Ltd.) also inched up 0.1%.

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