BLBG: Asian Stocks Fall to Three-Week Low as Yen Gains on Japan GDP
Aug. 16 (Bloomberg) -- Asian stocks fell, with the region’s benchmark index dropping to a three-week low, while the yen strengthened after Japan’s economy expanded more slowly than economists estimated. Copper futures rallied.
The MSCI Asia Pacific Index lost 0.5 percent to 117.26 as of 12:35 p.m. in Tokyo. Futures on the Standard & Poor’s 500 Index slipped 0.2 percent. The yen advanced against all of its 16 major counterparts while the won and ringgit weakened as concerns about global growth prompted investors to flee higher- yielding assets. Copper gained after Goldman Sachs Group Inc. recommended invest in raw materials.
“The outlook for economies worldwide is getting worse,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency broker. “Equities are sliding, with risk aversion prevailing and the yen and the dollar being bought.”
Chinese shares opened stronger, with the benchmark Shanghai Composite Index rising 1.3 percent, helping MSCI’s Asia to recover from the lowest level since July 22. Japan’s Nikkei 225 Stock Average dropped 0.9 percent and South Korea’s Kospi index lost 0.7 percent.
Sony, BHP
Sony Corp., which gets 22 percent of sales in the U.S., sank 2.9 percent, while Honda Motor Co., which generates more than 80 percent of its revenue abroad, retreated 1.6 percent in Tokyo. BHP Billiton Ltd., the world’s largest mining company, dropped 1.3 percent.
“Risk sentiment is weakening on increasing concerns about global growth,” said Kazumasa Yamaoka, a senior analyst at investment advisory company GCI Capital Co. in Tokyo.
Hong Kong stocks fell for a fifth day, dragging the benchmark index to its longest losing streak in three months, led by drops in developers after the city tightened mortgage lending rules. Sino Land Co., the worst performer on the Hang Seng Property Index this month, lost 1 percent. Sun Hung Kai Properties Ltd., Hong Kong’s biggest developer, plunged 4 percent. China’s stocks rebounded as alternative energy and health-care companies rallied on the prospect for increased investment. Baoding Tianwei Baobian Electric Co., which makes solar panels, surged 7.4 percent after the China Securities Journal reported the government may introduce a 10-year development plan for the alternative energy industry. Hualan Biological Engineering Inc. rose 5.5 percent.
Gold Stock
Zhongjin Gold Corp., the second-largest bullion producer, advanced 2.4 percent as prices for the precious metal increased for a third day. Gold for immediate delivery added 0.3 percent to $1,219.35 an ounce in Singapore.
“The wilting global economy is bringing investors back to the gold market,” said Park Hyun Seon, a Seoul-based trader with Eugene Investment & Futures Co.
The yen gained to 109.73 per euro in Tokyo from 109.92 in New York on Aug. 13. The dollar traded at $1.2790 per euro from $1.2754 in New York when it reached $1.2750, the strongest since July 22. The greenback was at 85.81 yen from 86.20 yen last week. It touched 84.73 yen on Aug. 11, the weakest since July 1995.
“There is a chance the yen will reach an all-time high and stay at that level for the time being,” Eisuke Sakakibara, formerly Japan’s top currency official, said yesterday on the Fuji television network. The yen peaked at 79.75 per dollar in April 1995.
Intervention Talk
Lawmakers from Japan’s ruling party last week urged Prime Minister Naoto Kan to consider intervening in the currency market, and for the Bank of Japan to “engage in large-scale monetary easing.”
“Speculation about possible policy action in Japan will make it difficult to test further upside of the yen for now,” said Tomohiro Nishida, a Tokyo-based foreign-currency dealer at Chuo Mitsui Trust & Banking Co.
The yen typically strengthens in times of financial and economic turmoil because Japan’s trade surplus frees the nation from dependence on overseas capital.
U.S. retail sales rose in July by less than economists had forecast and core consumer prices grew at a rate that matched the smallest year-over-year gain in 44 years, government reports showed on Aug. 13. The ZEW Center for European Economic Research’s index of German investor and analyst expectations fell for a fourth month, a survey of economists showed ahead of tomorrow’s data.
Copper for three-month delivery advanced 1 percent to $7,228.75 per metric ton in London after Goldman Sachs said demand from emerging markets and limited growth in supplies will help to support raw-materials prices.
The bank reiterated an “overweight” recommendation on commodities, analysts led by Allison Nathan and Jeffrey Currie wrote in a report, recommending crude oil, gold, copper, zinc and platinum.
--With assistance by Yasuhiko Seki in Tokyo. Editor: Patrick Chu
To contact the reporter for this story: Rocky Swift in Tokyo at rswift5@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net.
To contact the editor responsible for this story: Patrick Chu in Tokyo at pachu@bloomberg.net.
