Asian commodity stocks fell on concern a rally that had made the shares the region’s best performers in the past month had overvalued earnings prospects. Japanese companies reliant on overseas sales advanced. Daido Steel Co. slumped 3.2 percent on a Goldman Sachs Group Inc. downgrade, leading declines by materials producers. Feng Hsin Iron & Steel Co., which last week rose to a more than eight-month high, lost 3.4 percent in Taipei. Canon Inc., which gets 28 percent of its revenue in the Americas, climbed 4.9 percent in Tokyo after the yen weakened and the U.S. lost fewer jobs than expected last month. “We’re basically out of reasons to buy into the market as expectations of an economic recovery appear to be priced in,” said Yoshinori Nagano, a senior strategist at Daiwa Asset Management Co. in Tokyo, which oversees the equivalent of $96 billion. “The jobless figures are further evidence that we are on the mend, but I doubt we’ll see such a strong number again next month.” The MSCI Asia Pacific Index was little changed at 103.27 as of 1:37 p.m. in Tokyo, with about the same number of stocks falling as rising. The measure has climbed 46 percent from a more than five-year low on March 9 on optimism global growth is recovering. The rally drove valuations to an eight-month high. Japan’s Nikkei 225 Stock Average climbed 1 percent as the yen traded near its weakest in a month against the dollar. Komatsu Ltd., the world’s No. 2 maker of earthmovers, surged 5.2 percent after two brokerages recommended buying the stock. South Korea’s Kospi Index gained 0.2 percent, led by Samsung Engineering Co., which climbed 5.8 percent after Mirae Asset Securities Co. raised its share-price target. Taiwan’s Taiex Index sank 2.1 percent. Australia is closed for a holiday. Rising Valuations Futures on the Standard & Poor’s 500 Index lost 0.3 percent. The gauge fell 0.3 percent on June 5 as concern higher borrowing costs will threaten the economic recovery overshadowed the better-than-estimated employment report. The stock rally since March has lifted the average valuation of companies on MSCI’s Asian index to 1.5 times the book value of assets, the highest level since Sept. 29. Daido Steel slumped 3.2 percent to 448 yen after being cut to “neutral” from “buy” at Goldman Sachs. The stock closed last week at its highest level since Oct. 1. Feng Hsin sank 3.8 percent to NT$50.60 in Taipei. The Taiex Index, which rallied 15 percent last month, posted the biggest declines among Asia’s benchmark gauges today. “Taiwan shares are overvalued after rising so much in May, so there are foreign investors selling ,” said Kevin Yang, who manages $150 million as chief investment officer of Paradigm Asset Management Co. in Taipei. Best Performers Inpex Corp., Japan’s largest oil explorer, lost 0.8 percent to 822,000 yen following a 24 percent rally last week. Oil futures in New York dropped 0.7 percent in after-hours trading, adding to a 0.5 percent decline on June 5. Raw materials producers and energy shares are the best performing of the MSCI Asia Pacific Index’s 10 industry groups in the past month on optimism stronger economic growth will fuel demand for oil and metals. The U.S. Labor Department said on June 5 payrolls fell by 345,000 in May, compared with an average estimate for a decrease of 520,000 jobs in a Bloomberg survey of economists. The Bank for International Settlements said in its quarterly report today that the worst of the global recession may be over because governments and central banks have been successful in restoring investor confidence. Canon, the world’s largest camera maker, climbed 4.9 percent to 3,410 yen. Komatsu, which gets more than a fifth of its sales in the Americas, jumped 5.2 percent to 1,549 yen. Currency Market “With the U.S. economy so dependent on consumer spending, it’s a positive sign for the market that the job market isn’t as bad as we’d feared,” said Tomochika Kitaoka, a strategist at Mizuho Securities Co. in Tokyo. “The jobs data also moved the currency market, putting exporters into focus.” The yen weakened to as low as 98.89 versus the dollar, a level not seen in a month. Japan’s currency changed hands at 96.73 at the close of stock trading in Tokyo on June 5. A weaker yen helps boost the value of overseas sales when repatriated into the local currency. Komatsu climbed as a Morgan Stanley analyst started coverage of the company with an “overweight” recommendation and Nomura Holdings Inc. increased its rating to “buy” from “neutral.” Morgan Stanley’s Yoshinao Ibara said Komatsu shares may reach 1,800 yen because the company should benefit from a recovery of the global economy and demand for heavy equipment. Faltering Growth? Nomura, Japan’s largest brokerage, gained 3.9 percent to 793 yen as it was raised to “overweight” from “equal weight” at Morgan Stanley. Stocks in Japan rose even after a government report showed the country’s current-account surplus narrowed in April as the global recession cut demand for exports. Japan’s former Economic and Fiscal Policy Minister Hiroko Ota said in a June 4 interview that the world’s second-largest economy is likely to stumble again later this year after a temporary rebound. Samsung Engineering, South Korea’s biggest engineering company, climbed 5.8 percent to 87,800 won. Mirae Asset Securities lifted its target price to 117,000 won from 91,000 won and maintained its “buy” recommendation in a report today. Samsung Engineering submitted the lowest bids for four overseas projects, which should lead to orders, the brokerage said.

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