Asian Market Update: Investors take profit on Japanese stocks after top companies fail to provide bullish guidance - The NZD is gaining against a broadly stronger USD as Q4 labor costs rose more than expected (Q4 LABOR COST PRIVATE SECTOR QOQ: 1.0% V 0.7%E; ALL WAGES PRIVATE QOQ: 0.9% V 0.7%E). The rise in wages reinforces that further tightening by the Reserve Bank of New Zealand is warranted. The NZD remains well supported due to its yield, but gains are being capped by G7 risks. - The AUD is continuing to trade near session lows following a string of weaker than expected data releases. Australia's December retail sales rose by a less than expected (MoM: 0.3% v 0.5% expected), while December building approvals fell (MoM: -1.9% v -1.0%e and a prior increase of 3.5%). In the week ahead, a firmer USD should help to limit the scope for the AUD to gain should domestic data print on the strong side. - Major Currencies: The USD is currently gaining against most major currency pairs on a sharp revision to December nonfarm payrolls and ahead of upcoming ISM-Services data. Last week's forex trading was volatile, but major currencies ended within the previous week's range. Markets seem to have reached consensus that Fed will remain on hold. The CAD remains soft as strong US data suggests that US fixed securities may provide higher comparative returns. Traders focused on the Euro's technicals. Friday's sell off, taking EUR/USD below 1.3000/1.2981 levels, has formed an evening star, a top reversal signal. - Asian Currencies: The JPY is gaining across the board ahead of the G7 meeting. The market is speculating that G7 members, notably France and Germany, will comment on the JPY's recent weakness. Short covering in the JPY today was to be expected given that short positions in the yen have hit record highs for three straight weeks. The stronger JPY is leading to gains in the Taiwan Dollar and Korean Won. The market is expecting Taiwan exports to have accelerated from December levels. The Hong Kong dollar moved into negative territory after the Hong Kong Monetary Authority's Chief reiterated its commitment to maintaining the USD peg, adding that it has not been intervening in forex markets. - Equities: The Nikkei 225 is lower by more than 1%, coming off 10mnth highs, as shares of Nissan traded lower by more than 8% following soft guidance. Investors are taking profits on Japanese stocks after many top Japanese companies failed to provide bullish guidance. The KOSPI is gaining by more than 0.40%, led by gains in building stocks. The KOSPI is positive despite shares of Hyundai Motors falling by more than 2% after its Chairman was charged with embezzlement. UBS raised South Korea equities to overweight and said that it expects for South Korea to have a meaningful recovery in 2007. The ASX 200 index is lower by close to 0.3% on sharp declines in copper prices, but holding above the 5800 level. Shares of Multiplex rose sharply after it revealed that a private equity firm may bid for the entire company. China's Shanghai Composite Index is in negative territory, following sharp declines during the prior week as investors remain worried about further verbal intervention from Chinese officials. - Bonds: Japanese bond prices are higher tracking gains in US Treasuries following Friday's US jobs report. Declining Japanese equities also supported gains in bond prices. - Commodities: Shanghai copper opened limit down (4%) tracking the London Metals Exchange contract. Crude oil is continuing to trade higher and above the $59 on supply concerns and cold weather in the US Northeast. The US economy is showing strong growth, and some suggest that the prospect of stronger US growth is adding pressure on oil pricing to go up. Spot gold is tracking gains in crude oil, rising on the back of bargain hunting after a 1% drop in New York trading.