Most Asian Stocks Drop on U.S. Manufacturing, Rising Yen

Most Asian stocks fell, led by Japanese shares after data on U.S. manufacturing missed estimates and the yen strengthened, damping the earnings outlook for exporters.

Canon Inc., the world’s No. 1 camera maker, lost 3.4 percent in Tokyo. Toyota Motor Corp., the world’s biggest carmaker, slid 3.1 percent as Japanese vehicle sales fell by the most in six quarters as the government ended subsidies. Angang Steel Co. jumped 12 percent after the Chinese steel maker predicted it will post a first-quarter profit.

The MSCI Asia Pacific Index dropped 0.2 percent to 133.95 as of 7:46 p.m. in Tokyo, with about five companies retreating for every four that gained. The MSCI Asia Pacific Excluding Japan Index added 0.3 percent to 473.01. The Asia-Pacific index capped a five-month rally last week as Japanese shares gained on speculation the nation will deploy more stimulus and amid signs the U.S. economy is recovering.

“The bar has been set quite high now after such a long stretch of economic data outperforming expectations, and we are likely to go through a period when economic data will miss expectations,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $126 billion. “Markets are quite vulnerable to a corrective stage.”

Shares on the MSCI Asia Pacific Index traded at 13.3 times estimated earnings, compared with 14.1 times for the Standard & Poor’s 500 Index and 12.6 times for the Stoxx Europe 600 Index.

BOJ Meeting

Japan’s Topix Index dropped 0.9 percent before the Bank of Japan convenes April 3-4 in its first policy meeting after new Governor Haruhiko Kuroda took the post. Kuroda has pledged to do whatever it takes to beat deflation.

South Korea’s Kospi Index dropped 0.5 percent. International investors sold the most South Korean equities in 10 months in March amid concern the nation’s exporters will lose market share to Japanese rivals and as tension with North Korea built. New Zealand’s NZX 50 Index and the Shanghai Composite Index both fell 0.3 percent.

Australia’s S&P/ASX 200 Index gained 0.4 percent as the Reserve Bank of Australia kept its benchmark interest rate unchanged today. Billabong International Ltd., Australia’s largest surf-wear company, halted trade in its shares as it negotiates rival private equity bids.

Markets Reopen

Hong Kong’s Hang Seng Index rose 0.3 percent. Taiwan’s Taiex Index added 0.2 percent and Singapore’s Straits Times Index gained 0.2 percent. Markets in Australia, New Zealand and Hong Kong reopened today after a four-day weekend.

“We’ve had two days off and missed a lot of big news over that period, and I think chances are markets are likely to tread water a bit now as we move into the beginning of the first-quarter earnings season,” said Garry Evans, head of global equity strategy at HSBC Holdings Plc in Hong Kong. “We’ve had a big run in Japan and people are starting to look at the Bank of Japan meeting on Thursday and thinking it’s unlikely to beat very high expectations.”

Futures on the S&P 500 rose 0.5 percent today. The index fell 0.5 percent in New York yesterday, retreating from a record high, as the Institute for Supply Management’s factory index fell to 51.3 in March from 54.2 February, the Tempe, Arizona-based group said. The median forecast of economists surveyed by Bloomberg was for 54. A reading of 50 is the dividing line between growth and contraction.

Yen Rises

The yen rose against 14 of its 16 major counterparts. A stronger yen cuts the value of overseas earnings at Japanese exporters when repatriated.

Japanese exporters fell with Canon sliding 3.4 percent to 3,245 yen. Komatsu Ltd., a maker of construction equipment that gets about 80 percent of sales overseas, slipped 3.9 percent to 2,123 yen.

Carmakers fell after the number of vehicles sold in Japan, Asia’s second-largest auto market, fell 9.4 percent to 1.53 million in the three months through March, with Toyota recording a 15 percent drop, according to data released yesterday. In South Korea, the region’s fourth-largest vehicle market, deliveries slid 2.5 percent as Hyundai Motor Co. suffered a 0.7 percent contraction, based on company statements.

Toyota dropped 3.1 percent to 4,615 yen. Nissan Motor Co., Japan’s third-biggest carmaker, slipped 3.5 percent to 856 yen. Hyundai Motor, the biggest South Korean carmaker, lost 1.1 percent to 219,500 won.

STX Fund-Raising

STX Offshore & Shipbuilding Co. plunged 15 percent to 5,160 won in Seoul as it seeks help from creditor banks. STX Group has been selling assets, including its entire stakes in STX OSV Holdings Ltd. and STX Energy Co., as it seeks to raise 2.5 trillion won ($2.2 billion) to pay debt.

Shui On Land Ltd., the Chinese developer controlled by Hong Kong billionaire Vincent Lo, slumped 13 percent to HK$2.91 after underlying profit dropped 87 percent to 201 million yuan ($32 million) in 2012 and the company it will sell as many as 2.25 billion shares at HK$1.84 each to existing shareholders.

Among stocks that rose, Angang Steel climbed 12 percent to HK$4.78 after the company said it will report a first-quarter profit of 550 million yuan ($89 million), compared with a year earlier net loss of 1.9 billion yuan.

Qantas Airways Ltd. advanced 2.5 percent to A$1.83 after Australia’s biggest carrier said Europe bookings rose six-fold as an alliance with Emirates reduces flight times between the continents.

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