Most Asia Stock Markets Drop as Yen Weighs on Japan; China Gains

Most Asian stocks fell, as losses in Japanese equities on a stronger yen offset gains in Chinese shares and commodity producers.

Benchmark gauges in Japan, Australia and South Korea slid. Chinese markets bucked the trend as the Shanghai Composite Index jumped 1.6 percent. About 509 shares declined and 436 rose on the MSCI Asia Pacific Index, which was little changed at 126.36 as of 5:12 p.m. in Tokyo.

Global stocks are lower in April amid concern over the potency of central bank stimulus efforts and a selloff in Japanese equities. The yen held near the strongest level since October 2014, while China data showed producer prices posted their first gain since September 2013. The focus now turns to first-quarter earnings in the U.S.

“Yen strength is really hurting at the moment,” Steve Brice, chief investment
strategist at Standard Chartered Bank, told Bloomberg TV in Singapore. “It’s
shaken a lot of people’s confidence in Abenomics and the underlying thesis
behind holding Japanese equities. The extent of the strength we’ve seen has
surprised pretty much everybody.”

Japan’s Topix index declined 0.6 percent after a report showed machine orders dropped in February for the first time in three months. The yen rose in the previous six sessions. The equities gauge is down 17 percent in 2016, the steepest decline in global markets behind Italy. BlackRock Inc., the world’s largest money manager, is among firms ending bullish calls on Japan equities.

Regional Gauges

South Korea’s Kospi index, Australia’s S&P/ASX 200 Index and New Zealand’s S&P/NZX 50 Index fell 0.1 percent. Singapore’s Straits Times Index climbed 0.1 percent and India’s S&P BSE Sensex added 0.6 percent.

Hong Kong’s Hang Seng Index gained 0.4 percent and the Hang Seng China Enterprises Index rose 1.2 percent, climbing with mainland Chinese shares. The nation’s producer prices increased 0.5 percent last month from February, the first gain since September 2013, official data showed Monday. Consumer prices rose 2.3 percent in March versus a year earlier, unchanged from the previous month’s gain.

“The producer-price index number has delivered a signal that the economy is picking up and the consumer-price index is also acceptable as long as it doesn’t accelerate too fast,” said Wu Kan, a fund manager at JK Life Insurance in Shanghai. He said the China Securities Regulatory Commission’s plans to reduce the net capital ratio for brokerages would be positive for equities.

Futures on the Standard & Poor’s 500 Index rose 0.3 percent. The underlying gauge ended Friday up 0.3 percent as energy producers and mining stocks led gains.

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