Asian Stocks Fall on U.S. Jobless Claims, Strengthening Yen

By Patrick Rial and Satoshi Kawano

May 22 (Bloomberg) -- Asian stocks fell, paring a weekly advance, as worse-than-expected U.S. jobless claims, a weaker dollar and lower commodity prices dimmed the prospects for earnings at exporters and mining companies.

Sony Corp., which gets 24 percent of its revenue from America, slumped 2.8 percent in Tokyo as the yen climbed to a two-month high against the dollar. BHP Billiton Ltd., the world’s biggest mining company, retreated 2.3 percent in Sydney after oil and copper prices sank yesterday.

“Given we’ve seen some improvements in U.S. economic statistics, the deterioration of the job market is disappointing,” said Juichi Wako, a senior strategist at Nomura Holdings Inc., Japan’s top securities brokerage. “Employment reports indicate the future trend of consumer spending.”

Two stocks declined for each one that advanced on the MSCI Asia Pacific Index, which retreated 0.1 percent to 99.62 as of 10:16 a.m. in Tokyo. The gauge’s losses were limited because the strengthening yen boosted the value of Japanese stocks on the dollar-denominated index.

Japan’s Nikkei 225 Stock Average lost 0.4 percent to 9,231.66. All equity benchmarks open for trading declined except South Korea. Rio Tinto Group led declines in Australia after the Financial Times said Aluminum Corp. of China won’t agree to a stake of less than 15 percent in the company.

The MSCI Asia Pacific Index gained 11 percent on the year through yesterday. In Japan, companies on the Nikkei 225 trade at 40.3 times their estimated net income for this fiscal year, compared with 15.6 times for the Standard & Poor’s 500 Index in the U.S., according to Bloomberg data.

Jobless Claims

Futures on the U.S. Standard & Poor’s 500 Index added 0.3 percent. The gauge declined 1.7 percent yesterday as a Labor Department report showed initial jobless claims fell by 12,000 to 631,000 in the week ended May 16, while economists had expected claims would drop to 625,000.

Bill Gross, co-chief investment officer of Pacific Investment Management Co. said in a televised interview the U.S. will “eventually” lose its top AAA credit rating. Standard & Poor’s yesterday slashed its outlook on the U.K.’s AAA rating to “negative” from “stable,” citing swelling debt.

Sony, maker of the PlayStation 3 game console, dropped 2.8 percent to 2,430. Mazda Motor Corp., which gets 75 percent of its sales from overseas markets, tumbled 4.6 percent to 230 yen.

The Japanese currency strengthened to as high as 93.87 per dollar, a level not seen since March 19, from 94.56 at the 3 p.m. close of stock trading in Tokyo yesterday. Japanese large manufacturers anticipate the yen will trade at an average of 97.18 versus the dollar this fiscal year, the Bank of Japan’s Tankan quarterly survey showed last month.

BHP dropped 2.6 percent to A$33.50. Woodside Petroleum Ltd., Australia’s second-largest oil producer, dropped 3 percent to A$43.07. Posco, South Korea’s top steelmaker, fell 2.9 percent to 399,500 won.

Crude oil for July delivery declined 1.6 percent to $61.05 a barrel in New York yesterday, the first drop this week. Copper slumped 2.6 percent. A gauge of six metals in London dropped 3.7 percent, the most since April 20.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.