Asian Stocks Slide as Japan Retreats, Investors Await Fed, BOJ

Yen Drops Most in 17-Months
  • Slim majority of analysts predict BOJ will boost stimulus
  • Korean shipbuilders down on report of restructuring plan

Asian stocks fell, as telecommunication companies led Japanese shares lower and investors awaited policy decisions this week from the Federal Reserve and the Bank of Japan.

The MSCI Asia Pacific Index dropped 0.3 percent to 132.62 as of 4:06 p.m. in Hong Kong. Markets in Australia and New Zealand are shut for a holiday. While economists expect the Fed to keep U.S. interest rates unchanged when it meets on Wednesday, a slim majority of analysts project the Japanese central bank will boost monetary stimulus at its meeting the following day.

“Market participants are looking for new drivers for risk this week,” Bernard Aw, a market strategist at IG Asia Pte. in Singapore, said by phone. “With the barrage of economic data and two major central meetings, there will not be a shortage of catalysts.”

China is scheduled to release figures on March industrial profits on Wednesday, while Japanese data on inflation, retail sales and unemployment are due Thursday. Earnings will also be in focus, with Japan’s Nomura Holdings Inc. and major Chinese banks scheduled to report this week.

After a turbulent start to 2016, the rally in Asian shares since mid-February has pushed the dollar-denominated benchmark index back into positive territory. It’s now up 0.5 percent for the year, compared with a 2.3 percent gain for the Standard & Poor’s 500 Index.

Japan’s Topix index fell 0.4 percent after rising as much as 0.4 percent. The benchmark gauge climbed for a four straight session to the highest level since February last week. The gains have been bolstered by a recovery in oil prices, signs of stabilization in China’s economy and expectations the BOJ will continue efforts to support growth. The yen strengthened 0.6 percent to 111.16 a dollar after sliding 2.1 percent on Friday.

Commodity Curbs

China’s Shanghai Composite Index declined 0.4 percent to the lowest since March 29, led by raw-material producers after exchanges moved to cool trading in commodities including cotton and thermal coal and signs of accelerating economic growth reduced odds of further easing of monetary policy.

Singapore’s Straits Times Index dropped 1.6 percent, heading for its biggest decline since Feb. 24. The island nation’s consumer prices fell for a 17th consecutive month in March, the longest period of decline on record, reflecting the impact of lower oil costs and a weakening economy. Hong Kong’s Hang Seng Index lost 0.8 percent, South Korea’s Kospi Index fell 0.1 percent and Taiwan’s Taiex gauge added 0.3 percent.

KDDI Corp. and NTT Docomo Inc. fell at least 2.8 percent in Tokyo to lead declines among phone companies. Samsung Heavy Industries Co. dropped 7 percent, pacing losses among its peers after Korea Economic Daily reported the government is considering merging the defense-related businesses as part of plans to restructure the nation’s shipbuilding industry. Sembcorp Marine Ltd. slumped 4.9 percent in Singapore after the world’s second-largest builder of oil rigs initiated arbitration proceedings against key customer Sete Brasil Participacoes SA.

E-mini futures on the Standard & Poor’s 500 Index fell 0.5 percent. The U.S. equity benchmark closed unchanged on Friday, while the Nasdaq 100 Stock Index dropped 1.5 percent amid disappointing earnings from Microsoft Corp. and Google parent Alphabet Inc.

West Texas Intermediate crude fell as much as 1.8 percent on Monday, retreating from the highest close in five months amid signs a global glut will be prolonged as Middle East producers boost supplies.

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