BLBG: Asia Stocks Fall as Yen Reaches 15-Year High; Gold Nears Record
By Rocky Swift and Anna Kitanaka
Sept. 8 (Bloomberg) -- Asian stocks fell for a second day, led by Japanese equities, as the yen’s rise to a 15-year high threatened corporate earnings in the world’s third-largest economy. Gold was less than 1 percent from a record high.
The MSCI Asia Pacific Index lost 1.2 percent to 120.28 as of 1:23 p.m. in Tokyo. Futures on the Standard & Poor’s 500 Index dipped 0.2 percent after the gauge sank 1.2 percent in New York. The yen reached 83.35 per dollar today, the highest value since June 1995, and gained versus all 16 of its major counterparts on higher demand for Japan’s currency as a refuge. Oil dropped 0.5 percent to $73.72 a barrel and copper declined.
Nomura Holdings Inc. cut sales and profit forecasts for Japanese companies because of the stronger yen. Revenue growth of 353 companies excluding financials in the Nomura 400 stock index is projected at 4 percent from a June estimate of 4.4 percent. Stocks sank yesterday amid concern European lenders will require more capital. The Federal Reserve’s regional economic survey today may show the U.S. recovery is stalling.
“The bad news ball keeps being thrown between the U.S. and Europe,” said Ayako Sera, who helps oversee $310 billion as a strategist at Sumitomo Trust & Banking Co.. “The market is avoiding risk because there’s just no end to all this bad news we’re getting.”
About seven shares declined for every one that advanced on MSCI’s Asian gauge. Japan’s Nikkei 225 Stock Average slumped 2.3 percent. Canon Inc., which gets more than 80 percent of its sales outside Japan, lost 2.4 percent and Honda Motor Co., a carmaker with 46 percent of sales from North America, retreated 3.3 percent.
BHP Shares
Australia’s S&P/ASX 200 Index fell 0.7 percent. BHP Billiton Ltd., the world’s largest mining company, slipped 1.4 percent in Sydney as copper dropped for a second day, off 0.6 percent to $7,586 per metric ton.
The yen traded at 83.45 per dollar in Tokyo from 83.83 yesterday in New York. It was at 105.97 per euro from 106.32. Japan’s current-account surplus widened in July by more than economists had forecast, government data showed today, underscoring demand for the nation’s currency and debt in times of economic turmoil.
“There are lingering worries the U.S. economic recovery may be tepid,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “This is a negative for the dollar. The yen is being bought, partly because Japan has a current-account surplus.”
Sovereign Debt
Greek bonds plunged yesterday, pushing the yield on the 10- year security up 28 basis points relative to German bunds to 942 basis points, the most since the European Union and International Monetary Fund crafted a bailout package in May. A default by Greece could trigger the collapse of banks with large sovereign-bond holdings, according to Konrad Becker, an analyst at Merck Finck & Co. in Munich.
Japan’s bonds rose for a second day as data showed China bought more Japanese debt than it sold for a seventh-straight month in July. The yield on the five-year note dropped 4.5 basis points to 0.285 percent at Japan Bond Trading Co., the nation’s largest interdealer debt broker.
Treasury 10-year notes fell, paring some of yesterday’s biggest advance in a week. The yield on South Korea’s benchmark 3.75 percent note due June 2013 fell three basis points to 3.62 percent.
The Fed will release its Beige Book survey of conditions in its 12 districts today before officials meet to review monetary policy on Sept. 21. The jobless rate in the U.S. is likely to approach 10 percent in coming months from 9.6 percent, according to the median forecast in a Bloomberg survey of economists.
‘Lingering Worries’
Gold for immediate delivery traded little changed at $1,257.55 an ounce. The price climbed to $1,259.80 yesterday, the highest level since the record $1,265.30 on June 21. Bullion has jumped 15 percent this year and is set for its 10th annual gain. Coffee jumped to a 13-year high of $1.9355 a pound in New York yesterday on falling inventories and concern too much rain would hurt crops in Brazil and Colombia. Oil declined for a third day amid a forecast that U.S. crude inventories probably increased last week, a sign growth in fuel demand may slow.
The cost of protecting Asia-Pacific corporate and sovereign bonds from non-payment rose, according to traders of credit- default swaps. The Markit iTraxx Asia index of 50 investment- grade borrowers outside Japan rose 3 basis points to 125 basis points in Singapore, Royal Bank of Scotland Group Plc prices show. The Markit iTraxx Australia index advanced 3 basis points to 119.5 basis points in Sydney, according to BNP Paribas SA.
The Markit iTraxx Japan index increased 2 basis points to 108 basis points in Tokyo, according to Morgan Stanley. A basis point is 0.01 percentage point.
To contact the reporters for this story: Rocky Swift in Tokyo at rswift5@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net.
