By Shiyin Chen and Yoshiaki Nohara - Dec 27, 2011 1:10 PM GMT+0700
Asia stocks (MXAP) fell for the first time in three days after the Bank of Japan said risks to the economy have increased and before Italy sells bills and bonds this week. The Australian dollar weakened as copper declined.
Two shares declined for every one that gained on the MSCI Asia Pacific Index, which lost 0.2 percent as of 3:05 p.m. in Tokyo. U.S. financial markets open after the Christmas Day holiday today, while those in Australia, Hong Kong and the U.K. remain shut. The Aussie snapped a five-day rally, the won slid as much as 0.5 percent, while the euro was little changed versus the dollar and yen. Copper futures fell 1.3 percent in New York.
Some Bank of Japan board members cited Europe’s debt crisis and the yen’s appreciation as risks, according to minutes from a November meeting released today, while South Korea’s consumer confidence dropped and Chinese industrial companies’ profit growth cooled. Data today may show home prices in 20 U.S. cities fell at a slower pace and consumer sentiment improved. Italy will sell 9 billion euros ($12 billion) of 179-day bills and as much as 2.5 billion euros of zero-coupon 2013 bonds tomorrow.
“Economic uncertainty is deepening around the world,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co. “Investors find it hard to move near the year-end.”
Losses today helped extend the MSCI Asia Pacific Index’s decline this year to 18 percent. That will be the first annual retreat since 2008 and compares with a 12 percent drop on the Stoxx Europe 600 Index and a 0.6 percent gain in the Standard & Poor’s 500 Index.
Korea, Japan
The Kospi Index slipped 0.8 percent after the Bank of Korea said an index of sentiment fell to 99 in December from 103 in November. The gauge earlier sank as much as 2.3 percent, triggered by what exchange officials said was possibly an “erroneous” trading order and speculation over North Korea’s new leadership.
Japan’s Nikkei 225 Stock Average declined 0.5 percent. The value of stocks traded on the broader Topix index fell yesterday to 500.8 billion yen ($6.4 billion) yesterday, the lowest full- day turnover since May 2003, according to data compiled by Bloomberg. The Markit iTraxx Japan index of debt-default risk was unchanged at 187 basis points after having gained 85 basis points this year, according to Deutsche Bank AG prices and CMA.
The yen was little changed at 77.93 per dollar and traded at 101.88 against the euro. A “few” Bank of Japan board members “pointed to the possibility that downside risks to the economy had increased somewhat since the previous meeting” held in October, according to minutes of the bank’s Nov. 15-16 gathering published today in Tokyo.
The Aussie slid 0.2 percent to $1.0149, the won weakened 0.3 percent to 1,158.68 per dollar, while the euro was little changed at $1.3074.
Italian Yields
Ten-year Italian bond yields advanced six basis points to 6.98 percent on Dec. 23, approaching the 7 percent level that spurred Greece, Ireland and Portugal to seek bailouts.
The S&P 500 added 0.9 percent on Dec. 23, erasing its losses for this year, after data last week on durable goods, jobless claims and the housing market added to signs the world’s largest economy is recovering.
Property values probably dropped 3.2 percent in October from the same month in 2010, the smallest year-over-year decrease since January, according to the median forecast of 20 economists before a report from S&P/Case-Shiller today. Consumer confidence may have climbed to a five-month high of 58.6 in December from 56 last month, a separate survey showed before the New York-based Conference Board’s report.
Treasury 10-year yields declined two basis points to 2.01 percent. A basis point is 0.01 percentage point.
Copper for March delivery fell as much as 3 percent to $3.365 a pound before trading at $3.4245 on the Comex. Futures gained 4.2 percent last week. Immediate-delivery gold dropped 0.7 percent to $1,596.42 an ounce, while oil slipped 0.3 percent to $99.40 a barrel on the New York Mercantile Exchange, halting last week’s 6.6 percent advance.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; 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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