The yen and dollar strengthened, while metals fell and Asian stocks headed for their biggest quarterly loss since 2008 amid signs global economic growth is slowing. New Zealand’s currency fell and bond yields jumped the most this year after the nation’s credit ratings were lowered.
Japan’s currency rose 0.8 percent to 103.60 per euro as of 1:21 p.m. in Tokyo and the dollar gained 0.5 percent to $1.3534 versus the European currency. The kiwi sank 0.9 percent and New Zealand’s 10-year yields gained 12 basis points. Copper fell 2.4 percent. The MSCI Asia Pacific Index slid 1 percent, snapping a three-day rally, while Standard & Poor’s 500 Index futures decreased 0.5 percent.
Concern that Europe’s sovereign-debt crisis will spread and the U.S. economic recovery is faltering has wiped out more than $9 trillion of value from global equities this quarter, driving investors to the relative safety of the yen, dollar and Treasuries. Data today may show U.S. consumer spending slowed and German retail sales fell, after industrial production in Japan and South Korea grew less than economists had forecast and a China manufacturing index shrank for a third month.
“People are still very uncertain about the macro-economic outlook at this stage and risk off prevails until greater certainty comes to light in policy response,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Expectations are now at a much more realistic level moving forward given the ongoing concerns about sovereign debt bailouts and lack of self-sustaining growth in major economies.”
Yen, Dollar
The yen climbed 0.3 percent to 76.59 per dollar. The Japanese and U.S. currencies are the best performers this quarter among the 10 tracked by Bloomberg Correlation-Weighted Currency Indexes, gaining 13 percent and 6.4 percent, respectively.
Japan’s factory output increased 0.8 percent in August from July, the trade ministry said in Tokyo today, missing the 1.6 percent median estimate of 28 economists surveyed by Bloomberg News. South Korean industrial production rose 4.8 percent from a year earlier, trailing the median 6.1 percent gain forecast in a separate Bloomberg survey. The won weakened 0.6 percent to 1,180.58 per dollar, set for its largest monthly loss since February 2009.
The New Zealand dollar fell to 76.44 U.S. cents, on course for a second weekly loss. The nation’s sovereign credit rating was cut by one level to AA by Fitch Ratings. Its long-term local-currency rating was reduced to AA+ from AAA and long-term foreign-currency rating cut to AA from AA+ by Standard & Poor’s. Its benchmark 10-year yield climbed 0.12 percentage point to 4.43 percent, the biggest increase since Sept. 6, 2010.
U.S. Spending
Treasury 10-year notes snapped a five-day drop, dragging yields two basis point lower to 1.98 percent. Personal spending probably rose 0.2 percent in August, slowing from a 0.8 percent increase the previous month, according to a Bloomberg economist survey. S&P 500 futures expiring in December signal the U.S. stocks gauge may snap yesterday’s 0.8 percent gain.
Consumer and financial shares led losses on MSCI’s Asia Pacific Index, which pared its weekly advance to 1 percent. The gauge has dropped 16 percent since June, bound for its largest quarterly loss since the final three months of 2008.
Japan’s Nikkei 225 Stock Average dropped 0.2 percent, while South Korea’s Kospi Index fell 1 percent. The Hang Seng Index declined 2.1 percent in Hong Kong, where markets were closed yesterday after Typhoon Nesat battered the city.
China Growth
In Hong Kong, Gome Electrical Appliances Holding Ltd. plunged 16 percent after Credit Suisse Group AG lowered its rating on the Chinese appliance retailer. Evergrande Real Estate Group Ltd. (3333) and Wynn Macau Ltd. sank at least 14 percent.
More than half the global investors surveyed by Bloomberg predict Chinese growth will slow to less than 5 percent annually by 2016, according to results released yesterday. HSBC Holdings Plc and Markit Economics today said their purchasing managers’ index held at 49.9 in September, the third month of contraction.
Three-month copper dropped 2.4 percent to $7,060 a metric ton on the London Metal Exchange, a third day of losses. Prices have declined 25 percent this quarter, the most since 2008. Nickel fell 1.3 percent and tin retreated 1.7 percent.
Oil pared its biggest quarterly decline since the three months ended Dec. 31, 2008. Crude for November delivery gained as much as 1.3 percent to $83.23 on the New York Mercantile Exchange before trading at $82.47. Futures are down 14 percent this quarter.
The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment decreased, with the Markit iTraxx Japan index dropping eight basis points to 198.5 basis points, Citigroup Inc. prices show. That would be the biggest decline since Sept. 16, according to data provider, CMA.
The Markit iTraxx Australia index fell four basis points to 210 basis points, Westpac Banking Corp. prices show, while the Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan decreased six basis points to 232, Royal Bank of Scotland Group Plc prices show.
