BLBG:Yen Weakens as Europe Stocks Fluctuate; Rio Tinto Falls
The yen weakened for the first time in three days after Japan’s economy minister said his currency has more room to decline. European shares were little changed after Rio Tinto (RIO) Group announced $14 billion of writedowns.
Japan’s currency slid 1.1 percent against the dollar at 6:35 a.m. in New York, while the euro strengthened versus its 16 major peers. Spanish 10-year bonds erased their advance after a debt sale. The Stoxx Europe 600 Index (SXXP) rose less than 0.1 percent as Rio Tinto, the world’s second-biggest mining company, dropped to a one-month low. Standard & Poor’s 500 Index futures swung between gains and losses before companies from Citigroup Inc. to Bank of America Corp. report earnings. Oil approached a four- month high.
Economy Minister Akira Amari said the yen is still in the process of correcting from excessive gains and that his remarks earlier this week on yen weakness were misinterpreted. Sam Walsh will take over as Rio Tinto’s chief executive officer as Tom Albanese steps down and the company prepares to cut the value of acquisitions he oversaw by about $14 billion. U.S. housing starts rose to the fastest pace since 2008, a report today is forecast to show.
“Global growth looks better and the stress that we’ve seen in the markets is pulling back so that’s allowing Japanese policy makers to step up to the plate and jawbone and push for a weaker yen,” said Peter Frank, global head of foreign-exchange strategy in London at Banco Bilbao Vizcaya Argentaria SA. “We are looking for a gradual further weakening of the yen. The new government are being really aggressive and it’s hard to see their mission to weaken the yen not be successful.”
Currency War
Thailand’s finance minister today said the baht is “not at a good level,” while a Russian central bank official yesterday said the world is on the brink of a “currency war.”
The yen slid against its 16 major peers. The 17-nation euro gained 0.5 percent to $1.3360.
The yield on Spain’s 10-year bonds rose two basis points to 5.05 percent, after earlier dropping as much as three basis points to 4.995 percent. The nation sold 4.5 billion euros ($5.99 billion) of debt.
Rio Tinto retreated 2.5 percent in London. The miner’s 2 percent notes due 2020 fell 0.8 percent, the most on Bank of America Merrill Lynch’s Euro Corporates Index, pushing the yield up 13 basis points to 2.08 percent. The cost of insuring Rio Tinto debt jumped in the credit-default swap market, with contracts climbing 8 basis points to 92.5, the highest since Dec. 5.
Retailers Gain
Carrefour SA, Delhaize Group SA (DELB) and Associated British Foods Plc led gains among retailers. Carrefour, France’s biggest retailer, climbed 7.8 percent and Delhaize, the owner of Food Lion supermarkets in the U.S., rallied 7.9 percent as fourth- quarter revenue increased. AB Foods advanced 6.6 percent as the U.K. sugar producer that owns Primark clothing stores reported a 10 percent gain in first-quarter sales.
ASML Holding NV slid 3.5 percent after Europe’s largest semiconductor-equipment supplier predicted 2013 sales trailing analysts’ estimates as quarterly orders fell 20 percent.
Boeing Co. fell 2.8 percent in pre-market trading after the U.S. Federal Aviation Administration grounded all 787 Dreamliners after an emergency landing by one of the planes in Japan, pulling an entire airplane model out of service for the first time in 34 years.
CBS Corp. (CBS) jumped 8.2 percent in post-market New York trading after saying it will convert its outdoor advertising division into a real estate investment trust and seek a buyer for the European and Asian parts of the business.
Earnings Scorecard
Citigroup and Bank of America are among companies on the S&P 500 (SPX) scheduled to report earnings today. Of the 42 companies to have posted quarterly results since Jan. 8, 74 percent topped analysts’ profit projections, according to data compiled by Bloomberg.
Blackrock Inc. (BLK), the world’s largest asset manager, reported adjusted fourth-quarter earnings of $3.96 a share, compared with an estimate of $3.73 in a Bloomberg survey.
The S&P 500 rose less than 0.1 percent yesterday to close at the highest level since December 2007. A Commerce Department report due at 8:30 a.m. in Washington may show U.S. builders began construction on 3.3 percent more houses in December, according to a Bloomberg survey of economists. Initial claims for jobless benefits retreated to 368,000 last week from 371,000 the preceding period, separate data may show.
Oil gained 0.3 percent to $94.49 a barrel. Copper rose for the first time in five days, advancing 0.2 percent. The Copper Development Association says construction generates about 40 percent of demand for the metal.
Natural gas in the U.K. advanced to an 11-month high as temperatures fell to the lowest since February. Same-day gas jumped as much as 9.2 percent to 76 pence a therm. The low temperature in London today was minus 6 degrees Celsius (21 Fahrenheit) and will fall to 9 degrees below zero on Jan. 21, CustomWeather Inc. data on Bloomberg show.
The MSCI Emerging Markets Index (MXEF) rose 0.1 percent. The Shanghai Composite Index slid 1.1 percent before a report on fourth-quarter growth figures tomorrow. India’s Sensex gained 0.7 percent as foreign investors added to their holdings of domestic shares for a 13th straight day. Russia’s Micex Index jumped 0.3 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
