Japanese stocks climbed, bonds fell and the yen touched the weakest level since October 2008 as Group of Seven officials indicated they will tolerate a decline in the currency. Most Asian shares slid with gold and oil. Japan’s Topix Index (TPX) jumped 1.4 percent at 2:08 p.m. in Tokyo, as 10-year yields rose 11 basis points to 0.8 percent, the highest level since Feb. 6. The yen dropped 0.1 percent to 101.68 a dollar after falling to 102.15 earlier today. Standard & Poor’s 500 Index futures lost 0.3 percent after the measure closed at a record high last week. Gold dropped 1.2 percent, while oil in New York sank 0.7 percent. While signaling acceptance of the yen’s decline, G-7 policy makers said they examined Japan’s strategy and that they will monitor its impact on currencies. Data on Chinese industrial production and Indian consumer prices are due today, as well as debt sales by Italy and France. “Markets are prepared to back Japanese authorities’ attempt to reflate in terms of a weaker yen and expanding monetary base,� said Tim Schroeders, a portfolio manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “The export sector from Japan will be an obvious beneficiary of that.� G-7 policy makers reaffirmed a February commitment to “not target exchange rates,� U.K. Chancellor of the Exchequer George Osborne told reporters May 11. Bonds fell, sending U.S. Treasury 10-year yields to 1.94 percent, the highest level since March 26. Toyota, Nomura The Topix was headed for its highest close since September 2008 as Toyota Motor Corp., the world’s biggest carmaker, climbed 3.1 percent. Nomura Holdings Inc. (8604), Japan’s biggest brokerage, surged 8.6 percent on optimism rising trading volumes will boost earnings. Nippon Telegraph & Telephone Corp. jumped 5.9 percent after forecasting profit that beat estimates. The MSCI Asia Pacific excluding Japan Index sank 0.8 percent, as Chinese companies dragged Hong Kong’s Hang Seng Index down by 1.1 percent before the industrial production data. Figures on fixed-asset investment and retail sales are also due today. The Shanghai Composite Index lost 0.2 percent. “The statistics from China are still looking soft and if there is not enough growth momentum from China, that’s going to affect Chinese-related markets like Hong Kong,� said Tim Leung, a portfolio manager who helps oversee about $1.5 billion at IG Investment Ltd. in Hong Kong. Dollar Index The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, advanced 0.1 percent to 83.21. The yen has weakened 15 percent against the dollar this year as a leadership change in the Bank of Japan initiated unprecedented monetary easing. The Australian dollar fell toward an 11-month low before data on business confidence and amid speculation the central bank will cut interest rates further to curb the currency’s strength. The so-called Aussie lost 0.3 percent to 99.98 U.S. cents. South Korea’s won dropped for a third day, falling 0.8 percent against the greenback to 1,115.25. Gold declined for a third day in the longest slump since April, when the metal entered a bear market, as holdings of the SPDR Gold Trust, the biggest gold-backed exchange-traded product, resumed a drop and the dollar strengthened. Spot gold sank 1.2 percent to $1431.70 an ounce. Crude in New York dropped 0.7 percent to $95.36 a barrel, as the Organization of Petroleum Exporting Countries boosted output to the highest level in five months. Oil fell for a third day, the longest losing streak in four weeks. To contact the reporters on this story: Pratish Narayanan in Mumbai at pnarayanan9@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

Source