BLBG:Yen Gains as Asian Stocks Decline With Commodities on Japan Data
The yen strengthened and Asian shares fell after capping a third quarterly advance as a survey of sentiment among Japan’s largest manufacturers missed estimates. Commodities declined for a second day as corn and silver headed for a bear market.
The yen rose 0.7 percent to 93.58 per dollar as of 8:12 a.m. in London after last month capping the longest stretch of losses in 12 years. The MSCI Asia Pacific Index lost 1.1 percent as Japan’s Topix Index dropped 3.3 percent, the most since March 2011. Standard & Poor’s 500 Index (SPXL1) futures declined 0.1 percent after the gauge reached a record last week. The S&P GSCI Index of 24 commodities fell 0.6 percent. Corn sank to a nine-month low, silver retreated to the lowest since August and rubber entered a bear market. Markets in Australia, New Zealand, Hong Kong and most of Europe are closed.
The Bank of Japan’s Tankan index of confidence among large manufacturers lagged economist estimates while data today showed South Korean exports rose less than expected. A manufacturing gauge in China expanded at a faster pace even as data trailed forecasts. Global stocks beat all other investments for a second quarter, the first back-to-back outperformance since 2009.
“We need to see the economy showing signs of improvement and inflation numbers picking up in Japan,” Vasu Menon, head of content and research at OCBC Bank Ltd. in Singapore, said on Bloomberg Television’s On the Move with Rishaad Salamat. “China is recovering but the recovery is going to be a modest one.”
About three stocks fell for every one that rose on the MSCI Asian gauge, which has rallied in the past five months on signs the U.S. economy is recovering, gaining 4.8 percent last quarter. Japan’s Nikkei 225 Stock Average declined 2.1 percent. The Tankan rose to minus 8 in March from minus 12 in December, the Bank of Japan (8301) said today. The median estimate in a Bloomberg News survey was minus 7.
S&P Record
The S&P 500 Index climbed to a record on March 28, taking the quarter’s advance to 10 percent, as data bolstered confidence in the world’s largest economy. U.S. markets were closed on March 29. The Institute for Supply Management factory index will come in at 54 for March, little changed from February’s 54.2, which was the highest since June 2011, economists estimated before data today.
In China, the Shanghai Composite Index and the CSI 300 Index swung between gains and losses. The official Purchasing Managers’ Index was at an 11-month high of 50.9 in March, data showed today. That compares with 50.1 in February and the 51.2 median estimate in a Bloomberg News survey. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., the country’s biggest producer of rare earth, slumped 2.3 percent after profit fell 57 percent last year.
Rubber, Corn
Copper for July delivery on the Shanghai Futures Exchange fell as much as 2.2 percent to 53,600 yuan ($8,634) a metric ton, the lowest level since July. Copper futures in New York, which lost 6.9 percent last quarter, slid 1.7 percent to $3.346 a pound. The London Metal Exchange is closed today. China is the largest user of industrial metals.
Silver for immediate delivery fell as much as 1.9 percent to $27.9088 an ounce. A close at or below $28.01 an ounce would be a decline of 20 percent from an October high of $35.0125. Prices slid 6.2 percent in the three months through March 31.
Corn led declines in agricultural commodities after the U.S. government said inventories were bigger than forecast and acreage may climb to the highest since 1936. Corn in Chicago slumped to $6.625 a bushel. A close at or below $6.71 would be a drop of 20 percent from this year’s high. Corn lost 0.4 percent in the first quarter of the year.
Rubber futures in Tokyo dropped 2.6 percent to 266.9 yen a kilogram ($2,844 a ton), a 20 percent drop from the highest settlement this year for a most-active contract of 334 yen reached Feb. 6. Rubber fell 9.4 percent over the last three months.
Won, Euro
South Korea’s won touched 1,116.86 per dollar, the weakest since March 22, before trading at 1,114.72. The country’s overseas sales rose 0.4 percent in March from a year earlier, after an 8.6 percent drop in February, data showed today. The median estimate in a Bloomberg News survey was for a 1.8 percent gain. The currency also fell as North Korea said on March 30 that a “state of war” exists with the South.
The yen strengthened against all its major peers as the drop in stocks boosted demand for haven assets. It rose 0.8 percent to 119.88 per euro. Unemployment in the euro area probably climbed to an all-time high of 12 percent in February, economists estimated before a report tomorrow. European Central Bank officials meet this week to set interest rates.
“Structural issues in the euro zone are far from over and from time to time, these issues will come up to the surface and affect market sentiment,” Kelvin Tay, chief investment officer for the southern Asia-Pacific region at UBS AG’s wealth management unit, told Bloomberg Television. “We need continually positive numbers to come out from the U.S. economy to show that the recovery in the U.S. is sustainable.”
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
