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Japanese stocks fell after they resumed trading from the New Year break, with the Nikkei 225 posting its biggest drop since October. Japanese exporters were hit the most after a stronger Yen weighed on the stocks. Bank of Japan Governor Haruhiko Kuroda said Japan’s central bank won’t necessarily end or scale back stimulus in two years and will continue with the program until inflation stabilizes at 2 percent.

The majority of other Asian markets were in negative territory, falling to three-week lows after China’s services sector slowed sharply last month. The latest reading raises concerns about the pace of the recovery in the world’s second-largest economy. WTI crude remains steady ahead of ISM non-manufacturing data which is likely to show a rebound from 53.9 in November, maintaining the above 50 reading which signals expansion among companies 

The week ahead will be an important one for UK retailers with Marks & Spencer and Tesco issuing a report on Thursday for their Christmas sales figures. This comes after Debenhams issued a major profit warning last week, highlighting it has been a tough Christmas as consumers search for online bargains. 

Concluding the week, US monthly unemployment figures will be watched more closely than usual after the Federal Reserve slowed monetary stimulus last month. Non-farm employment rate are scheduled a reduced reading from last month at 194,000.

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