BLBG:Yen Drops to June 2009 Low as Commodities Rebound, Won Declines
The yen dropped to the lowest since June 2009 and the Nikkei 225 Stock Average rose to a 4 1/2-year high after the Bank of Japan (8301)’s unprecedented stimulus measures last week. Commodities rebounded while Chinese shares declined with the won. European stock-index futures rose.
The yen sank 1 percent to 98.54 per dollar as of 7:07 a.m. in London after earlier touching 98.85. The Nikkei 225 jumped 2.8 percent while the Shanghai Composite Index fell 0.8 percent. Euro Stoxx 50 Index contracts advanced 0.2 percent and Standard & Poor’s 500 Index futures were little changed. The S&P GSCI Index of 24 commodities gained 0.4 percent. South Korea’s currency slid to the weakest level in more than eight months. Bond risk in Japan dropped and Australian government bonds rose.
Japan’s Nikkei 225 Index has risen 6.7 percent and the yen has declined 5.6 percent since the Bank of Japan said April 4 it would double bond buying to reach its target of 2 percent annual inflation within two years. South Korea warned of a North Korean missile test on April 10. China reported three more infections from a bird-flu virus that’s killed six people since March.
“With the currency weakening to the 98 yen per dollar range, exporters’ earnings may come in above expectations” this reporting season, said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. As avian flu spreads in China, “it’s necessary for us to assess its impact on the Asian stock market.”
Credit Risk
The yen fell 0.9 percent to 127.87 per euro after touching 128.44, the weakest since January 2010. Japan rebounded to a current-account surplus in February as a depreciating yen and record monetary stimulus improved the outlook for a revival in the world’s third-biggest economy.
The cost of insuring corporate bonds in Japan against non- payment extended falls to the least in 2 1/2 years, credit- default swap prices show. The Markit iTraxx Japan index declined 4 basis points to 92 basis points, according to Citigroup Inc. prices.
About five stocks rose for every four that fell in the MSCI Asian gauge as concern the deadly outbreak in China will hurt food manufacturers and airlines offset gains in Japanese exporters. The Nikkei 225 (NKY) closed at its highest since Aug. 12, 2008. Honda Motor Co., which gets about 80 percent of its sales outside Japan, gained 3.7 percent.
China Vanke
China’s CSI 300 Index (SHSZ300) retreated 0.7 percent and Taiwan’s Taiex Index dropped 2.4 percent as markets reopened after a two- day holiday. Shijiazhuang Yiling Pharmaceutical Co. jumped by the 10 percent daily limit in Shenzhen after the company said one of its products was included in the government’s list of drugs for the H7N9 virus. EVA Airways Corp. (2618) sank 6.8 percent in Taiwan on concern the outbreak will hurt travel demand.
The Shanghai Composite Index headed for its lowest close this year after Beijing raised the minimum down payment on second home purchases. China Vanke Co., the biggest developer listed on Chinese exchanges, declined 2.9 percent.
The won slid 0.7 percent to 1,140.15 per dollar after touching 1,139.65, the lowest since July, as heightened risk of conflict with North Korea spurred outflows of foreign funds. North Korea warned embassies to evacuate because it won’t be able to guarantee the safety of foreign missions in the event of a conflict.
Australia’s 10-year bond yields decreased nine basis points to 3.22 percent after touching 3.18 percent, the lowest since Dec. 12. Signs of a slowing U.S. economy are boosting demand for the safety of government debt.
Alcoa Earns
S&P futures capped their biggest weekly drop of the year April 5 as U.S. jobs data missed estimates. Alcoa Inc. (AA) is due to kick off the first-quarter earnings-reporting season in the U.S. today. Income at S&P 500 companies decreased 1.8 percent in the first three months of the year, according to analyst estimates compiled by Bloomberg. That would mark the first year-over-year decrease in profit since 2009.
In Europe, Anheuser-Busch InBev NV (ABI), the world’s biggest beermaker, may move after the company reached an agreement in principle on its takeover of Grupo Modelo SAB and said it plans acquisitions in China.
Natural gas futures in New York climbed to $4.152 per million British thermal units. Prices have advanced 24 percent this year and the commodity is top performer in the S&P’s GSCI Index of 24 raw materials. Unusually cold weather in March bolstered heating demand and reduced stockpiles.
Wheat, Copper
The S&P GSCI gauge rebounded from the worst weekly performance since September. Oil in New York climbed 0.3 percent to $92.94 a barrel after the biggest weekly drop in six months. Brent crude in London gained 0.5 percent to $104.60 a barrel.
Wheat increased for a second day to $7.05 a bushel after China’s state-owned researcher Grain.gov.cn reported today that the nation bought as many as 16 cargoes of U.S. wheat April 4. Prices have plunged as much as 30 percent from a four-year high in July. Soybeans advanced 1.1 percent to $13.76 a bushel, ending three days of losses.
Copper in London rose after falling for three consecutive weeks as data showed orders to remove the metal from warehouses rose to the highest level in more than 15 years. The metal for delivery in three months increased 0.8 percent to $7,464.50 a metric ton. Lead and nickel climbed at least 0.4 percent.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net
