Asian Stocks Fall as Yen Gains Amid Growth Concerns; Oil Drops

By Jae Hur & Adam Haigh

Asian stocks declined from the highest level since June 2008, led lower by Japanese shares as the yen strengthened and data signaled a slowdown in global business activity. Oil and copper dropped.

The MSCI Asia Pacific Index dipped 0.3 percent as of 1:31 p.m. in Tokyo as Japan’s Topix Index slid 0.6 percent after posting its best month since 1999. Standard & Poor’s 500 Index futures were little changed. The yen climbed 0.2 percent to 97.27 per dollar. Australia’s two-year bond yield touched the lowest since Nov. 1. Crude oil declined 0.5 percent, and copper lost 0.5 percent after the biggest monthly loss since May. An Australian manufacturing gauge slumped to a four-year low as currency strength weighed on exporters, while China’sPurchasing Managers’ Index expanded at a slower pace, reports showed today. U.S. private employers probably added the fewest jobs in six months, economists forecast, after business activity unexpectedly shrank in April for the first time in more than three years.

“There is little doubt that risks to global economic growth for 2013 are tilted to the downside,” said Matthew Sherwood, the Sydney-based head of investment market research at Perpetual Ltd., which manages about $25 billion. “Earnings growth after several years of very subdued performance still seems a bit of a stretch.”

Markets in China, Hong Kong, India, South Korea, Taiwan,Singapore, Malaysia, Thailand, Vietnam and the Philippines are closed today for holidays. The S&P 500 Index (SPX) climbed to a record yesterday as consumer confidence gained and investors bet central banks worldwide will continue stimulus efforts.

The Federal Reserve may consider maintaining its bond- buying program at a two-day meeting concluding today, while most economists in a Bloomberg News survey predict theEuropean Central Bank will cut interest rates this week.

China PMI

The Australian Industry Group said its manufacturing index plunged 7.7 points to 36.7 last month. China’s PMI was at 50.6, the National Bureau of Statistics and China Federation of Logistics and Purchasing said. That compared with the 50.7 median forecast of analysts and a March reading of 50.9.

South Korea’s exports rose 0.4 percent in April from a year earlier, according to today data from the Ministry of Trade, Industry and Energy, less than the 2 percent median forecast of analysts.

The Topix (TPX) Index gained 13 percent in April, the most since March 1999. It’s rallied more than 60 percent from mid-November through yesterday as Japanese Prime Minister Shinzo Abe and central bank Governor Haruhiko Kuroda pledged to defeat 15 years of deflation.

Astellas, Canon

Tokyo Electric Power Co., operator of the stricken Fukushima nuclear power plant, slid 2.6 percent after reporting a loss six times bigger than its forecast.

Astellas Pharma Inc. slid 1.4 percent after U.S. regulators said its cancer drug produced with Aveo Pharmaceuticals Inc. may need another clinical trial. Canon Inc., the world’s biggest camera maker, declined 2.2 percent.

ASX Ltd. rose 0.1 percent toward the highest closing level in two years after the operator of Australia’s main stock exchange reported a 9.5 percent increase in third-quarter sales.

The dollar fell versus the yen for a fifth day, the longest losing streak since September, on speculation the Fed won’t slacken its bond-buying program to prop up the economy.

Economists estimate the ADP Research Institute will say today that private U.S. employment rose 150,000 last month, the smallest gain since October. The MNI Chicago Report’s business barometer, considered a proxy for factory activity, fell to 49 in April, the lowest level since, figures showed yesterday.

Crude, Gold

The cost of insuring corporate bonds in Australia and Japan against non-payment decreased, according to traders of credit- default swaps. The Markit iTraxx Japan index fell 0.5 of a basis point to 82.5 basis points as of 8:25 a.m. in Tokyo, according to Citigroup Inc. prices. The benchmark has tumbled 76.5 basis points this year and is trading at lows last seen in May 2008, according to Citigroup and data provider CMA.

The Markit iTraxx Australia index declined 1.25 basis points to 104.25 as of 9:00 a.m. in Sydney, according to Westpac Banking Corp. The gauge ranged from 105.9 basis points to 123.1 in April, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.

West Texas Intermediate crude fell for a second day after Organization of Petroleum Exporting Countries’ production climbed to a five-month high and an industry group said U.S. stockpiles rose for the first time in three weeks. Oil traded at $93.02 a barrel after losing 1.1 percent yesterday.

Gold for immediate delivery slid 0.1 percent to $1,474.80 an ounce, extending its worst monthly loss in more than a year. Wheat for delivery in July lost 1.1 percent to $7.2275 a bushel on the Chicago Board of Trade. Copper lost 0.5 percent to $7,017.50 a metric ton. The S&P GSCI gauge of 24 commodities fell 0.6 percent.

To contact the reporters on this story: Jae Hur in Tokyo at jhur1@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net

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