Asian Stocks Decline as U.S. Manufacturing Misses, Yen Rises

Asian stocks fell for a second day,
led by Japanese shares, after data on U.S. manufacturing missed
estimates and the yen rose to a four-week high versus the
dollar, damping earnings prospects for exporters.

Sony Corp. (6758), an electronics maker that gets 19 percent of
its sales in the U.S., fell 2.4 percent in Tokyo. Toyota Motor
Corp. (7203), the world’s biggest carmaker, slid 1.5 percent as
Japanese vehicle sales fell by the most in six quarters after
government subsidies ended. Billabong International Ltd.,
Australia’s largest surf-wear company, halted trade in its
shares, as it negotiates rival private equity bids.

The MSCI Asia Pacific Index dropped 0.4 percent to 133.58
as of 9:33 a.m. in Tokyo before markets in Hong Kong and China
opened. The measure fell 1 percent yesterday, the biggest loss
in two weeks. The MSCI Asia Pacific Excluding Japan Index added
0.2 percent to 472.83.

“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.”

The MSCI Asia Pacific Index gained 3.7 percent this year
through yesterday, led by Japanese shares on speculation the
nation will deploy more stimulus. The Asia benchmark traded at
14.8 times estimated earnings on average, 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 (TPX) slumped 1.8 percent before the Bank of
Japan meets April 3-4 in its first policy meeting after new
Governor Haruhiko Kuroda took office. Kuroda has pledged to do
whatever it takes to beat deflation.

South Korea’s Kospi Index was little changed. International
investors sold the most South Korean equities in 10 months in
March amid concerns the nation’s exporters will lose market
share to Japanese rivals and as tension with North Korea built.
Australia’s S&P/ASX 200 Index gained 0.4 percent and New
Zealand’s NZX 50 Index dropped less than 0.1 percent.

Markets in Australia, New Zealand and Hong Kong reopen
today after a four-day weekend.

Futures on the S&P 500 (SPXL1) were little changed 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.

The yen reached 92.96 per dollar today, the highest level
since March 5, and rose against 11 of its 16 major counterparts.
A stronger yen cuts the value of overseas earnings at Japanese
exporters when repatriated.

To contact the reporter on this story:
Yoshiaki Nohara in Tokyo at
ynohara1@bloomberg.net

To contact the editor responsible for this story:
Nick Gentle at
ngentle2@bloomberg.net.

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