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Asian Stocks Fall From 3-Month High Before FOMC Meeting

Plant in Kawasaki City
A worker cycles past a plant in Kawasaki City, Kanagawa Prefecture, Japan. The nation's machinery orders rose 6.5 percent in July from a year earlier after rising 4.9 percent in the previous month, according to a government report released today. Photographer: Haruyoshi Yamaguchi/Bloomberg

Sept. 12 (Bloomberg) -- Asia’s benchmark stock index retreated from a three-month high as investors await the outcome of the Federal Reserve’s meeting next week.

Toyota Motor Corp. dropped 1.1 percent, pacing losses among Japanese exporters as the yen rose for a second day. Sino Biopharmaceutical Ltd. tumbled 16 percent, prompting a trading suspension, after a report by state-run Chinese Central Television alleged bribery at a unit of the medicine maker. Qantas Airways Ltd., Australia’s largest carrier, climbed 2.9 percent after the Australian Financial Review reported it may share its Sydney terminal with unit Jetstar Airways.

The MSCI Asia Pacific Index fell less than 0.1 percent to 137.5 as of 7:31 p.m. in Tokyo, for its first decline in 11 days. The gauge climbed 6.6 percent in the past 10 days. The gauge’s 14-day relative strength index, an indicator of trading momentum, is at 66, near a threshold of 70 that may signal to some analysts shares may have risen too far.

“Investors are skittish as global recovery remains on an uneven path,” Desmond Chua, at analyst at brokerage CMC Markets in Singapore, said in a telephone interview. “Investors are waiting for more positive catalysts from economic data. They are looking ahead for the outcome of the Fed meeting and the Syrian dialogue.”

The U.S. central bank has said any reduction in stimulus will be tied to a sustained recovery in employment. The Fed will decide to cut its $85 billion in monthly bond purchases when it meets Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg last month.

Interest Rates

The Reserve Bank of New Zealand, which kept its key interest rate at a record-low 2.5 percent today, said it is likely to raise borrowing costs in 2014. Central banks in South Korea and the Philippines also kept their benchmark rates unchanged, while Indonesia unexpectedly increased its reference rate.

Japan’s Topix index slipped 0.4 percent. The nation’s machinery orders rose 6.5 percent in July from a year earlier after gaining 4.9 percent in the previous month, according to a government report released today. That missed economist estimates for a 7.7 percent increase.

The Topix has advanced 7.1 percent this month amid optimism about Tokyo hosting the 2020 Summer Games, taking its gains for the year to 38 percent, the best among developed markets tracked by Bloomberg. India’s S&P BSE Sensex fell 0.7 percent. The Philippine Stock Exchange Index lost 0.3 percent, while the Jakarta Composite Index was little changed.

‘Wait-and-See Mode’

“We’re in wait-and-see mode ahead of next week’s Federal Open Market Committee meeting,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co. in Tokyo. “While the situation in Syria has calmed for now and China looks like it’s seen the worst of its slowdown, buying after the Olympics news seems to have run its course and the yen has stopped weakening, making exporters less attractive.”

The Hang Seng China Enterprises Index of mainland Chinese companies traded in Hong Kong closed little changed. It climbed 20 percent from a June 25 low this week, entering what some investors consider a bull market, as China’s manufacturing output accelerated to a 17-month high.

China’s Shanghai Composite Index advanced 0.6 percent, while Hong Kong’s Hang Seng Index gained less than 0.1 percent. Taiwan’s Taiex index added 0.2 percent and Singapore’s Straits Times Index increased 0.4 percent. South Korea’s Kospi index was little changed.

Australia’s S&P/ASX 200 Index added 0.2 percent to close at a five-year high. The nation’s unemployment rate climbed to a four-year-high 5.8 percent in August from 5.7 percent in July, the statistics bureau reported. New Zealand’s NZX 50 Index rose 0.1 percent.

U.S. Futures

Futures on the Standard & Poor’s 500 Index lost 0.1 percent. The equity gauge gained 0.3 percent to a one-month high in New York yesterday as diminishing concern over a military strike against Syria offset Apple Inc.’s biggest decline since April after the company introduced a cheaper iPhone.

The MSCI Asia Pacific Index climbed 6.4 percent this year through yesterday. Shares on the Asia-Pacific gauge traded at 13.4 times estimated earnings, compared with 15.3 times for the S&P 500, according to data compiled by Bloomberg.

Japanese exporters declined after the yen rose as much as 0.7 percent today against the U.S. dollar, its second day of advance. A stronger yen reduces the value of overseas income at automakers and electronics manufacturers when repatriated.

Toyota, Asia’s biggest carmaker, fell 1.1 percent to 6,270 yen in Tokyo. Nissan Motor Co., partly owned by Renault SA, slid 1.2 percent to 996 yen. Sony Corp., the maker of Bravia televisions and PlayStation game consoles, dropped 1.2 percent to 2,103 yen.

Share Sales

Mitsubishi Motors Corp. slumped 8.1 percent to 1,028 yen. The maker of Lancer sedans is nearing a decision to raise as much as 200 billion yen ($2 billion) via a public offering of new shares as it seeks to buy back preferred stock held by other Mitsubishi companies, two people with direct knowledge of the plan said.

Sharp Corp. declined 6 percent to 363 yen following Japanese media reports the TV maker may announce a share sale to bolster its balance sheet as early as next week.

Sino Biopharm tumbled 16 percent to HK$4.76 before trading was suspended in Hong Kong, the biggest decline since October 2000. Credit Suisse Group AG cut its rating on the stock to underperform from neutral after the CCTV bribery report.

Among shares that rose, Qantas climbed 2.9 percent to A$1.445. The company may consider moving its unit Jetstar to Sydney airport’s international terminal, the Australian Financial Review quoted chief executive Alan Joyce as saying.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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