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HONG KONG - Asian markets were mixed Friday and the euro sat near multi-year lows amid Europe's deepening debt woes, while disappointing US data and Chinese manufacturing numbers also weighed on sentiment.
With investors scrambling for safer haven assets such as the yen, Japan's finance minister pledged "decisive action" if it keeps rising, indicating a fresh intervention by Tokyo.
Tokyo fell 1.32 percent, Sydney dropped 0.40 percent and Seoul eased 0.23 percent but Shanghai was 0.60 percent higher and Hong Kong rose 0.14 percent by the break.
The weak start to June comes after a miserable May in which most markets gave up almost all the gains they had made since the turn of the year as the eurozone's debt crisis came back into sharp focus.
While Greece's political and economic future remains uncertain, Spain's banking sector is looking increasingly fragile, stoking fears that Madrid -- already battling fiscal woes -- could need an international bailout.
On Friday China said manufacturing activity grew at a much slower rate than expected in May, further confirming the world's number two economy is slowing rapidly after recent poor figures on trade, investment and industrial output.
The official purchasing managers index (PMI) fell to 50.4 from 53.3 in April, the China Federation of Logistics and Purchasing said in a statement.
A reading above 50 indicates expansion, while a reading below 50 suggests contraction.
"The rather sharp decline in the May PMI accords with the trend of economic slowdown," Zhang Liqun, an analyst with the federation, said in a statement.
Despite the figures Hong Kong and Shanghai shares rose, with Zhou Xu, an analyst with Nanjing Securities, saying: "The market had already priced in an economic slowdown after data from April showed a weakening trend."
In the United States on Thursday the government lowered its estimate for first-quarter economic growth, to 1.9 percent from 2.2 percent, raising questions over how much of a rebound could be expected in the current quarter.
Two jobs reports -- weekly unemployment claims and private-sector job creation in May -- both were disappointing, indicating slow improvement in the economy.
On Wall Street the Dow fell 0.21 percent, the S&P 500 lost 0.23 percent and the Nasdaq slipped 0.35 percent.
The gloomy data sent dealers out of risk assets, pushing the euro lower.
The single currency was changing hands at $1.2331 in Tokyo morning trade from $1.2361 in New York late Thursday. Earlier Friday the unit briefly fell to $1.2323, a 23-month low.
It also remained weak against the safe-haven Japanese currency at 96.89 yen, compared with 96.82 yen in New York late Thursday, where at one point it fell to 96.51 yen, its lowest level since December 2000.
The dollar bought 78.60 yen, from 78.33 yen in New York.
Japanese Finance Minister Jun Azumi said Friday he would take "decisive action" if the yen kept rising, with his remark interpreted as a threat of market intervention to curb the yen's strength.
Japanese financial authorities have previously intervened in currency markets, including after the yen reached historic highs against the dollar last year. A stronger yen hurts exporters as it makes their goods more expensive overseas.
On oil markets New York's main contract, West Texas Intermediate (WTI) crude for delivery in July, was down 33 cents to $86.20 per barrel while Brent North Sea crude for July shed 35 cents to $101.52 in morning trade.
Gold was at $1,554.30 an ounce at 0420 GMT, compared with $1,566.06 late Thursday.
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