Asian Stocks Fall as Japan Shares Extend Decline on Yen

Asian stocks fell, with Japanese shares capping their longest losing streak in two months as the yen strengthened a day after the Bank of Japan opted to hold off on fresh monetary stimulus until next year.

Nissan Motor Co. (7201), an automaker that gets about a third of its revenue from North America, dropped 2.8 percent in Tokyo. LG Household & Health Care Ltd. (051900), a maker of household products, slumped 7.5 percent in Seoul after forecasting 2013 operating profit that fell short of expectations. China Vanke Co., the country’s biggest publicly traded property developer, extended gains to a record in Shenzhen on plans to move trading of its foreign-currency denominated shares to Hong Kong.

The MSCI Asia Pacific Index fell 0.5 percent to 132.29 as of 7:22 p.m. in Tokyo, with more than twice as many shares declining as rising. The gauge rallied 11 percent through yesterday from Nov. 14, when the announcement of Japanese elections sparked optimism a new leadership would take more steps to spur its economy.

The Bank of Japan meeting “marked yet another faltering step on the path toward reflation,” said David Homan, New York- based director of macro strategy at Credit Suisse Group AG. The decision “leaves a lot of steps still to come. The reality for reflation still looks more like a slow-burning fuse.”

Governor Masaaki Shirakawa’s board said yesterday the Bank of Japan won’t begin indefinite purchases of government bonds until January 2014 in pursuit of a 2 percent inflation target.

Nikkei, Kospi

Japan’s Nikkei 225 Stock Average slumped 2.1 percent, falling for a third day. The gauge rose 24 percent through yesterday from Nov. 14 on optimism the central bank would add stimulus amid pressure from Prime Minister Shinzo Abe’s new government.

Australia’s S&P/ASX 200 Index (AS51) climbed 0.2 percent after a report showed the nation’s fourth-quarter inflation rate rose less than forecast. South Korea’s Kospi Index (KOSPI) lost 0.8 percent. Hong Kong’s Hang Seng Index (HSI) slid 0.1 percent and China’s Shanghai Composite Index gained 0.3 percent.

Malaysian stocks will probably stay volatile until polling day, according to Citigroup Inc. The benchmark FTSE Bursa Malaysia KLCI Index rose 0.4 percent today after slumping 2.9 percent in the past two days on concern the ruling coalition may lose seats.

Japan’s exporters declined. The yen added to an advance yesterday that was the biggest in eight months after the BOJ announced its delayed increase in monetary easing. A stronger yen reduces overseas income at Japanese companies when repatriated.

Exporters Slide

Nissan fell 2.8 percent to 842 yen in Tokyo. Yokohama Rubber Co. (5101), which gets about a fifth of its revenue from North America, slid 2 percent to 630 yen.

The MSCI Asia Pacific Index, the benchmark regional equities gauge, traded at 14.3 times average estimated earnings compared with 13.4 for the Standard & Poor’s 500 Index and 12.1 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the S&P 500 slipped 0.1 percent today. The gauge climbed 0.4 percent yesterday after better-than-forecast earnings from companies including Travelers Cos. and Freeport- McMoRan Copper & Gold Inc.

BHP Billiton Ltd. (BHP), the world’s No. 1 mining company by market value, climbed 1.3 percent to A$37.06 in Sydney after saying its total copper concentrate output at Chile’s Escondida mine is on track to rise by 20 percent during fiscal 2013.

China Vanke’s Hong Kong dollar-denominated B-shares rose 6.9 percent to HK$16.17 in Shenzhen. The company is headed for a 26 percent three-day gain on plans to convert all 1.3 billion B- shares into Hong Kong-listed H shares.

Nexon Surges

Nexon Co. (3659), a Japanese online game distributor, surged 12 percent to 1,001 yen, the steepest gain in the MSCI Asia Pacific Index, after Goldman Sachs Group Inc. raised the stock’s price target to 1,450 yen from 1,350 yen while maintaining a buy rating.

Shenzhen Investment Ltd. (604), a company backed by the Chinese city of the same name, jumped 16 percent to HK$3.91 in Hong Kong after saying it will buy land there from shareholder Shum Yip Group Ltd. for 4.15 billion yuan ($667 million) in stock.

“We see this asset injection as a positive first step,” Christie Ju, an analyst at Jefferies Group Inc., wrote in a report dated yesterday. “Shenzhen Investment is well positioned to become a leader in the Shenzhen residential market.” Jefferies raised its 12-month target price on the stock to HK$4.30 from HK$3.30, reiterating its buy rating.

LG Household Drops

Among stocks that fell outside Japan, LG Household & Health Care slumped 7.5 percent to 619,000 won in Seoul, the biggest drag on the MSCI Asia Pacific Index. Samsung Securities Co. said the company’s 535 billion won ($503 million) operating profit for 2013 is “conservative.”

Nufarm Ltd. tumbled 9.2 percent to A$5.75 in Sydney after the agricultural-chemicals supplier said it will lose BASF AG’s distribution rights and its local unit will miss its profit target.

To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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