Asian Stocks Decline as Japanese Exporters Drop on YenYoshiaki Nohara and Jonathan Burgos
Asian stocks dropped, with the regional benchmark index heading for its longest streak of weekly losses in a year, as Japanese exporters retreated after the yen’s biggest surge in three years.
Japan’s Topix index and Nikkei 225 Stock Average pared declines as the Government Pension Investment Fund called a briefing about proposed changes to its asset portfolio. Honda Motor Co., which gets 83 percent of its sales overseas, slipped 3.9 percent. Newcrest Mining Ltd. slumped 7.6 percent as Australia’s biggest gold producer said it will write down the value of its mines by as much as A$6 billion ($5.7 billion).
The MSCI Asia Pacific Index was little changed at 131.36 as of 8:21 p.m. in Tokyo as gains by the yen increased the value of Japanese companies in the dollar-denominated measure after the country’s markets closed. Almost two shares retreated for each that gained. The gauge is headed for a 2.5 percent decline this week, its third straight, the longest such run of losses in a year. Japanese shares have slumped this week after Prime Minister Shinzo Abe failed to impress investors in a speech outlining his growth strategy.
“Abe’s growth strategy has already been priced in, getting rid of buying opportunities,” said Isao Kubo, a Tokyo-based equity strategist at Nissay Asset Management Corp., which oversees about 6 trillion yen ($62 billion.) “Japanese shares and the yen have corrected a lot to the point where some investors may as well buy the stocks. But we are not seeing buying because the global market is volatile ahead of a U.S. jobs report.”
Japan’s Topix index closed 1.3 percent lower, paring an earlier decline of 3.5 percent and taking its losses since a high on May 22 to about 17 percent. The Nikkei 225 Stock Average lost just 0.2 percent, rebounding from a 2.8 percent drop. Even after recent declines, Japan’s is the best-performing share market in the developed world this year.
GPIF, which managed 112 trillion yen at Dec. 31, said after Japan’s equity markets closed that it will reduce its holdings of local bonds and buy more equities. The proportion of Japanese shares will increase to 12 percent from 11 percent and foreign stocks will be boosted to 12 percent from 9 percent, the Health, Labour and Welfare Ministry said.
“What they’ve reduced in Japanese government bonds,they’re basically taking abroad,” said Masaru Hamasaki, a strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees the equivalent of $100 billion. “They’ve been trying to get away from a bias toward Japan, and just because stocks are rising now doesn’t mean they will so easily change their view. They are probably looking at how far stocks have come and their outlook for growth, and I can’t imagine that they’re that bullish.”
Australia’s S&P/ASX 200 Index declined 0.9 percent and New Zealand’s NZX 50 Index slid 0.4 percent. South Korea’s Kospi index dropped 1.8 percent, reopening following a public holiday. Hong Kong’s Hang Seng Index lost 1.2 percent and China’s Shanghai Composite Index fell 1.3 percent.
Futures on the S&P 500 Index were little changed today after the gauge gained 0.9 percent in New York yesterday. A Labor Department report today is expected to indicate employers added 163,000 to non-farm payrolls last month, almost equal to the gain in April. Fed Chairman Ben S. Bernanke in May suggested the central bank could curtail its bond buying if the job market improves in a “real and sustainable way.”
The MSCI Asia Pacific gauge has fallen more than 9 percent from this year’s high on May 20 on speculation that improvement in the U.S. economy will lead the Federal Reserve to scale back record stimulus.
The measure yesterday traded at 12.8 times average estimated earnings, compared with 14.8 for the Standard & Poor’s 500 Index and 12.9 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Japanese exporters dropped as the yen headed for its biggest weekly advance since October 2008. A stronger yen reduces the value of overseas sales when repatriated.
Honda slipped 3.9 percent to 3,495 yen. Toyota Motor Corp., the world’s biggest carmaker, fell 2.8 percent to 5,480 yen. Panasonic Corp., Japan’s second largest television maker, sank 3.6 percent to 721 yen.
Newcrest Mining slumped 7.6 percent to A$12.35 after announcing the writedown due to a slump in gold prices. The cut in value of mines will have a “material impact on the 2013 financial year statutory accounts,” the Melbourne-based company said today in a statement.
Samsung Electronics Co., the world’s largest smartphone maker, tumbled 6.2 percent to 1.427 million won in Seoul, the most since August 2012, after analysts at JPMorgan Chase & Co. cut profit estimates, citing slowing demand for its flagship Galaxy S4.
Financial stocks led declines in Hong Kong’s Hang Seng Composite Index as China’s money-market rates jumped. People’s Insurance Company Group of China Ltd., owner of the nation’s biggest casualty insurer, sank 5.7 percent to HK$3.61. Industrial & Commercial Bank of China Ltd., the world’s top lender by market value, fell 1.1 percent to HK$5.24.
Among stocks that gained, Texhong Textile Group Ltd. surged 8.4 percent to a record closing high of HK$12.16 after the fabric maker said earnings may jump.