Asian Stocks Drop Ahead of Fed, Bank of Japan Policy Meetings

  • Suppliers to Apple fall in Tokyo trading on sales estimate
  • Canon shares slide after camera maker cuts profit forecast

Asian stocks fell as suppliers to Apple Inc. declined and earnings from Canon Inc. disappointed investors, while fund managers awaited policy decisions from the Federal Reserve and the Bank of Japan.

The MSCI Asia Pacific Index dropped 0.7 percent to 131.43 as of 5:05 p.m. in Tokyo. The gauge is up about 16 percent from this year’s low in February amid optimism the Fed will be patient with increases to interest rates, while Japan’s central bank steps up measures to shore up its economy.

Suppliers to Apple slid after the smartphone maker posted its first quarterly revenue drop in more than a decade and forecast another decline in the current period. iPhone parts maker Alps Electric Co. fell 1.2 percent, while Murata Manufacturing Co. slipped 4.4 percent in Tokyo. iPhone sales in China, Taiwan and Hong Kong sank 26 percent in the period, a major shift from just a couple of years ago, when sales in the region were more than doubling with regularity.

“It’s pretty disappointing,” Angus Nicholson, a Melbourne-based market analyst at IG Ltd., said by phone. “These aren’t good numbers out of the China segment which people are most concerned about, and if that continues to play out it will be a concern going forward.”

Japan’s Topix index lost 0.5 percent. Canon was the second-biggest drag on the Topix after cutting its full-year operating profit forecast by 17 percent. Twenty-three of 41 analysts surveyed by Bloomberg expect the BOJ will expand stimulus on April 28. Japan’s consumer prices and retail sales data for March will also be released Thursday in Tokyo.

With policy makers and investors assessing data to judge the strength of the U.S. economy, a report Tuesday showed orders for U.S. durable goods climbed less than expected in March. A separate reading on home prices in 20 U.S. cities rose less than forecast in February from a year earlier, while consumer confidence decreased more than predicted in April.

“We may see weaker volume as investors hold off ahead of the Fed meeting today and the BOJ tomorrow,” IG’s Nicholson said. “Speculation is pretty high that we’re going to see some sort of announcement of further easing from the BOJ, particularly with regard to an increase in ETF purchases, a benefit to the equity market.”

E-mini futures on the Standard & Poor’s 500 Index slipped 0.2 percent after the underlying gauge rose 0.2 percent Tuesday as a rally in oil prices boosted commodity producers. Crude extended gains on Wednesday from the highest level in more than five months as U.S. industry data showed a decline in stockpiles.

Apple shares fell as much as 8.3 percent in after-hours U.S. trading. Sales in the third quarter, which ends in June, will be $41 billion to $43 billion, the Cupertino, California-based company said Tuesday in a statement. On average, analysts estimated revenue of $47.4 billion, according to a Bloomberg survey.

Australia’s S&P/ASX 200 Index fell 0.6 percent, led by banks, after bets surged that the central bank will cut interest rates next month, weakening the earnings outlook for mortgage providers. Inflation unexpectedly slowed in the first quarter, a report showed Wednesday. Commonwealth Bank of Australia lost 2.5 percent and Westpac Banking Corp. declined 2 percent in Sydney.

South Korea’s Kospi index retreated 0.2 percent and New Zealand’s S&P/NZX 50 Index slid 0.7 percent. Singapore’s Straits Times Index fell 0.8 percent. Hong Kong’s Hang Seng Index lost 0.2 percent, while the Hang Seng China Enterprises Index of mainland stocks traded in the city rose 0.2 percent. The Shanghai Composite Index slipped 0.4 percent.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE