By Darren Boey and Anna Kitanaka June 9 (Bloomberg) -- Asian stocks fell, led by Japanese exporters, and the yen strengthened to near an eight-year high against the euro on growing concerns that Europe’s debt crisis will hurt global economic growth. The MSCI Asia Pacific Index declined 0.8 percent to 109.47 as of 12:40 p.m. in Tokyo, set to close at the lowest level since May 25. Japan’s Nikkei 225 Stock Average slumped 1.3 percent. Standard & Poor’s 500 Index futures fell 0.3 percent. The yen appreciated to 109.32 per euro from 109.51 in New York yesterday. Copper futures in London erased gains after rising as much as 1.3 percent. Investors became more risk averse after Fitch Ratings said yesterday the U.K. faces a “formidable” fiscal challenge. Global investors have little confidence in Europe’s efforts to contain its debt crisis, a quarterly poll of investors and analysts who are Bloomberg subscribers showed, with 73 percent of those surveyed calling a default by Greece likely. The International Monetary Fund said economic risks have risen “significantly.” “Market sentiment is very bearish,” said Prasad Patkar, who helps manage about $1.5 billion in Sydney at Platypus Asset Management Ltd. “Everyone is focusing on any bad news they can get their hands on. When the tide is so heavily bearish, any reason is used to sell-off and any good news is ignored.” Two stocks declined for each one that advanced on the MSCI Asia Pacific Index. The Nikkei 225 sank even as a Cabinet Office report showed the nation’s machinery orders rose more than economists estimated in April. South Korea’s Kospi lost 0.4 percent and Hong Kong’s Hang Seng Index decreased 0.5 percent. Canon, Honda Japan’s exporters dropped on concern a stronger yen will hurt the value of repatriated overseas earnings. Nissan Motor Co., a carmaker that gets about 75 percent of its revenue outside Japan, slumped 3.1 percent to 620 yen in Tokyo. Canon Inc., which counts Europe as its biggest market, declined 1.6 percent to 3,630 yen. Honda Motor Co., which makes 81 percent of its sales abroad, fell 3.1 percent to 2,613 yen. “European fiscal issues have reduced risk tolerance, which drags down Japanese stocks because companies here are greatly dependant on external demand,” said Hideo Arimura, a senior fund manager who oversees $2.2 billion at Mizuho Asset Management Co. The yen strengthened to as much as 108.90 per euro, near the 108.08 level on June 7 that was the highest since November 2001. Europe’s shared currency declined to $1.954 from $1.973 yesterday in New York. It reached $1.1877 on two days ago, the weakest level since March 2006. Fed Tightening The euro weakened as economists surveyed by Bloomberg forecast the European Central Bank, which meets tomorrow, will leave its key interest rate at a record low. Federal Reserve Chairman Ben S. Bernanke testifies before a House Budget Committee today after saying June 7 in Washington that the central bank will raise rates before the economy returns to full employment. “The Fed will be tightening before the ECB with the U.S. economy recovering at a faster pace,” said Adam Carr, a senior economist at ICAP Australia Ltd. in Sydney. “Both those things are dollar supportive.” South Korea’s won slipped 0.6 percent to 1,240.90 per dollar toward a one-week low as Finance Minister Yoon Jeung Hyun said he will take “prompt action” should financial markets become more volatile due to Europe’s debt crisis. “The market is caught up in the European hysteria,” said Philip Wee, a Singapore-based senior currency economist at DBS Group Holdings Ltd. Metal Prices Copper for three-month delivery in London traded was little changed at $6,166.50 a metric ton, having advanced as much as 1.3 percent earlier. Zinc tumbled 2.5 percent, aluminum fell 0.2 percent and nickel declined 0.9 percent amid concerns demand will decline should economic growth slow. Most advanced economies are experiencing a “subdued” recovery, IMF Deputy Managing Director Naoyuki Shinohara said in remarks prepared for delivery in Singapore today. “A key concern is that the room for continued policy support has become much more limited and has, in some cases, been exhausted.” Oil gained for a second day, rising 0.6 percent to $72.43 a barrel in new York, after the industry-funded American Petroleum Institute said U.S. crude supplies dropped last week. To contact the reporters for this story: Darren Boey in Hong Kong at dboey@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net.

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