By James Regan and Akiko Ikeda April 8 (Bloomberg) -- Asian stocks fell for the first time in six days after Japanese machinery orders unexpectedly dropped and U.S. consumer credit slumped more than economists forecast. The euro weakened after credit-default swaps suggested Greece is more likely to default on its debt than Iceland. The MSCI Asia Pacific Index declined 0.4 percent to 127.80 as of 12:42 p.m. in Tokyo, retreating from its highest close since August 2008. Standard & Poor’s 500 Index futures slipped 0.2 percent. The euro fell versus the dollar and the yen, as it has every day this week, before a meeting today at which the European Central Bank is expected to keep its main refinancing rate at a record-low 1 percent to spur spending. Federal Reserve Chairman Ben S. Bernanke said yesterday the U.S. is “far from being out of the woods” in recovering from its worst recession since the 1930s. Reports showing American consumer credit decreased $11.5 billion in February from the previous month and Japan’s machinery orders declined 5.4 percent fanned concern demand is cooling in the world’s two largest economies. Economists expected $700 million less credit and a 3.7 percent increase in orders, Bloomberg surveys showed. “People see a drop in U.S. consumer borrowing as an indication personal income and consumer spending in the region are not on a solid uptrend,”said Mitsushige Akino, who oversees the equivalent of $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “That concern is reducing risk tolerance.” Thai Emergency In Thailand, the SET Index of shares slipped 0.5 percent from a 22-month high and the cost of protecting the nation’s sovereign bonds from default rose after Bangkok was placed under a state of emergency. Prime Minister Abhisit Vejjajiva sought to prevent weeks of anti-government protests turning violent after demonstrators stormed parliament. Indonesia’s Jakarta Composite Index retreated 0.4 percent from a record close after Perry Warjiyo, the head of the central bank’s economic research and monetary policy division, said local stocks are in a “bubble” and officials are prepared to introduce capital controls should the flow of foreign funds lead to problems. Overseas investors pumped $536 million into the nation’s shares last month, the most since April 2007. Japan’s Nikkei 225 Stock Average sank 1 percent, headed for its lowest close this month, and Australia’s S&P/ASX 200 Index fell 0.8 percent from its highest close since September 2008. BHP Billiton Ltd., the world’s largest mining company, declined 2 percent to A$43.70 after crude oil and metals prices slipped. That’s the biggest slide in six weeks. Oil, Metals “The market’s had a decent run and people are looking for things to worry about,” said Mark Daniels, who helps manage about $19 billion at Aberdeen Asset Management Ltd. in Sydney. Crude oil futures in New York fell 0.1 percent to $85.76 a barrel in after-hours trading, extending yesterday’s 1.1 percent slump. Three-month copper on the London Metal Exchange dropped as much as 0.9 percent today to $7,871 a metric ton, having earlier this week exceeded $8,000 for the first time since the collapse of Lehman Brothers Holdings Inc. in 2008. Aluminum, lead and zinc prices also declined. The euro weakened 0.1 percent to $1.3333 in Tokyo, from $1.3344 late yesterday in New York and $1.3504 at the end of last week. Against the yen, the 16-nation currency slid 0.2 percent to 124.35, extending this week’s drop to 2.7 percent. European retail sales were unchanged in February from a month earlier, according to economists surveyed by Bloomberg before the report today. There was zero economic growth in the region from October through December, the statistics office said yesterday, after previously reporting a 0.1 percent expansion. Greece Risk “Poor economic growth prospects and European credit risk concerns are pushing the euro down,” said Imre Speizer, a market strategist in Wellington at Westpac Banking Corp. “If the negative sentiment around Greece continues to linger, it poses an ongoing negative for risk appetite.” Credit-default swaps tied to Greece’s sovereign debt rose to 415 basis points yesterday and those on Iceland traded at about 400 basis points, according to Markit Group Ltd. data. Iceland had to resort to a $4.6 billion International Monetary Fund-led bailout following the failure of its three largest banks in October 2008. Greece may default on its debt as early as this year without “extraordinary” financial assistance from the European Union and IMF, Stephen Jen, managing director of BlueGold Capital Management LLP in London, said yesterday in an interview. To contact the reporter for this story: James Regan in Hong Kong Jregan19@bloomberg.net;

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