Dollar, Yen Gain as Topix Falls on Equity Sales; Kiwi Weakens

By Yoshiaki Nohara and Chan Tien Hin
Nov. 19 (Bloomberg) -- The dollar and yen strengthened and the Topix Index fell for a seventh day as Japanese companies tapped equity markets to ride out a slump in the world’s second- largest economy. The New Zealand dollar weakened.
The Topix lost 2 percent to 833.12 as of 2:22 p.m. in Tokyo, suffering its longest losing streak since July, as Mitsubishi UFJ Financial Group Inc. and Nomura Real Estate Residential Fund Inc. filed to sell shares. The dollar and yen rose against their
14 most-traded counterparts, according to data compiled by Bloomberg. Stock declines were limited after Maxis Bhd. climbed as much as 10 percent on its trading debut in Malaysia.
Investors who want to be "overweight" Japanese stocks during the next year compared with those who plan to be "underweight" dropped this month to the lowest level since November 2002, according to a report yesterday from Bank of America Corp.’s Merrill Lynch & Co. unit. Japan’s economy is a drag in the region that’s leading the recovery from first global recession since World War II. Singapore today forecast growth of as much as 5 percent in 2010.
"Risk aversion is taking hold somewhat, bringing down Japan’s stocks, as serious concerns remain about the financial sector," said Masahide Tanaka, senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second-largest lender. "Japan’s deflation-locked economy is clearly lagging behind others toward recovery."

Dollar, Yen, Gold

The dollar rose 0.3 percent versus the euro to $1.4912 and the yen strengthened 0.6 percent against the 16-nation European currency to 132.91. Gold, a hedge against a decline in the dollar, dropped 0.4 percent after reaching a record $1,153.40 an ounce yesterday.
"Gold’s looking a bit overbought," Lin Yuhui, deputy general manager at Jinhui Futures Co., said from Shenzhen.
New Zealand’s dollar, known as the kiwi for the flightless bird on its currency, fell against all major counterparts after an opposition political party said it no longer supported the central bank’s efforts to target inflation.
"The system we have causes widespread damage to the tradable sector," Labour Party leader Phil Goff said today in Wellington. "The battle against inflation is no longer New Zealand’s sole over-riding policy objective."
The kiwi lost 1.2 percent, headed for its biggest decline this month. The Australian dollar weakened for a third day against the U.S. currency, losing 0.6 percent.
Mitsubishi UFJ declined 4.1 percent to 464 yen after filing with regulators to raise as much as 1 trillion yen ($11.2
billion) in its second share sale since January as regulators demand banks bolster capital. A sale of that size would be Japan’s biggest public sale of additional common shares, Bloomberg data show.

Nomura Real Estate

Nomura Real Estate sank 8.8 percent to 351,000 yen. The real estate investment trust plans to raise as much as 11.5 billion yen from a sale of new shares, according to a filing with Japan’s Finance Ministry.
The drop in Japanese shares dragged the MSCI Asian Pacific Index to a 0.9 percent decline to 117.48. The MSCI Emerging Markets Asia Index rose 0.4 percent to a 16-month high before slipping 0.3 percent to 396.02. Maxis, Malaysia’s biggest mobile-phone operator, jumped to as much as 5.50 ringgit ($1.63) in its first day of trading in Kuala Lumpur after its $3.3 billion initial public offering this month.
Grand Korea Leisure Co., which started trading on the Korea Exchange, surged 36 percent to 16,350 won ($14.13) from the initial share price of 12,000 won. The company was rated "buy"
as Daewoo Securities Co. initiated coverage with a 16,000 won price target.

Asia’s Growth

The International Monetary Fund raised its forecast for growth in the global economy next year to 3.1 percent from 2.5 percent, led by a 9 percent expansion in China and 6.4 percent in India, the Washington-based organization said on Oct. 1. That compares with growth of 1.7 percent in Japan, 1.5 percent in the U.S. and 0.3 percent in the euro region.
"Money is flowing to Asia to take advantage of its stronger and more resilient growth," Jason Chong, who helps oversee $1.6 billion as Chief Investment Officer at UOB-OSK Asset Management in Kuala Lumpur. "If you look at the world population, 60 percent of the world population is in Asia. It is this trend of increasing domestic consumption that will make Asia more resilient in terms of growth going forward."
Singapore’s economy will expand 3 percent to 5 percent in 2010 after shrinking as much as 2.5 percent this year, the trade ministry said today. Gross domestic product jumped at a revised annualized rate of 14.2 percent last quarter from the previous three months, the second consecutive climb.
Malaysia’s ringgit and Indonesia’s rupiah led declines in Asian currencies on speculation policy makers will restrain gains to support exports. The ringgit dropped 0.5 percent to 3.3840 per dollar. The rupiah declined 1.4 percent to 9,530.

Central Banks Wary

"Most of the traders are aware central banks in this region have been quite wary of the strength in local currencies," said Tetsuo Yoshikoshi, a senior economist in Singapore at Sumitomo Mitsui Banking Corp. "The over-extension of the strengthening has triggered some kind of a correction."
Rubber futures in Tokyo climbed as much as 2.6 percent to the highest in almost 14 months as shippers in Thailand, the largest producer, raised prices.
"Heavy rains hinder tapping," said Takaki Shigemoto, a commodity analyst at research and investment company JSC Corp.
The April-delivery contract rose as much as 6.2 yen to 244.60 yen a kilogram.
Rice futures advanced for a second day after Thai Prime Minister Abhisit Vejjajiva said yesterday that India was seeking to buy as much as 2 million metric tons. The Philippines, the world’s top importer, has also advanced purchases this month after storms damaged local crops. The January-delivery contract on the Chicago Board of Trade gained as much as 0.5 percent to $15.27 per 100 pounds.