Yen, Dollar Fall; Aussie, Kiwi Rise on Job Gains, Rate Outlook

By Yasuhiko Seki and Candice Zachariahs
Dec. 10 (Bloomberg) -- The yen and the U.S. dollar weakened against the currencies of Australia and New Zealand after faster Australian job growth and prospects for higher rates prompted investors to seek higher-yielding assets. Asian stocks fell.
The Aussie gained 0.73 percent to 91.53 U.S. cents. New Zealand’s Kiwi rose 1.3 percent to 72.83 U.S. cents. The yen fell against higher-yielding currencies. The Morgan Stanley Asia Pacific Index fell 0.7 percent to 119.18 at 6 p.m. Tokyo time.
Europe’s Dow Jones Stoxx 600 Index rose 0.6 percent to 242.76.
Standard & Poor’s 500 Stock Index futures rose 0.2 percent.
Australian companies added six times as many jobs as economists estimated last month. New Zealand’s central bank Governor Alan Bollard said he expects to raise interest rates in the middle of next year as the housing market surges. Most Asian stocks declined on speculation further gains in the yen will hurt export earnings and as $5.5 billion of bonds issued by Dubai-backed companies comes due in four days.
"Australia’s data revived confidence in the bright story for the global economy," said Tomohiro Nishida, a foreign- currency dealer in Tokyo at Chuo Mitsui Trust & Banking Co.
"Renewed risk sentiment will support higher-yielding assets and pressure funding-currencies such as the yen and the dollar."
The dollar weakened against 12 of its 16 most-traded counterparts before a Labor Department report forecast by economists to show initial jobless claims fell for a sixth- straight week, curbing demand for the greenback as a refuge.

Growing Economies

The number of Australians employed gained 31,200 in November, the statistics bureau said in Sydney today, while the median estimate from economists was for an increase of 5,000.
New Zealand central banker Bollard said he expects to raise rates around the middle of 2010, as the nation’s economy will expand faster in the first quarter than previously estimated.
In Dubai, Nakheel PJSC’s $3.52 billion of Islamic bonds due Dec. 14 fell to a record low 45 cents yesterday, according to Citigroup Inc., amid rising concern more of the emirate’s companies will fall behind on debt payments.
Nakheel’s parent company Dubai World is seeking to restructure $26 billion of obligations. Dubai Electricity & Water Authority may have to repay $2 billion of bonds Dec. 14 after rating downgrades triggered an acceleration clause in the securities’ documentation, according to Standard & Poor’s.
Hong Kong’s Hang Seng Index lost 0.7 percent. Japan’s Nikkei 225 Stock Average dropped 1.4 percent. The S&P/ASX 200 Index sank 0.8 percent in Australia, even after a government report showed the country’s jobless rate dropped.

Equity Movers

Mazda, Japan’s fourth-largest automaker, slid 3.5 percent to 194 yen, while Honda Motor Co., which gets 42 percent of its sales in North America, lost 1.5 percent to 2,930 yen.
Suzuki Motor Corp. dropped 5.5 percent to 2,240 yen even after Volkswagen AG said it will buy a 19.9 percent stake in the Japanese automaker.
China’s Shanghai Composite Index was little changed as investors weighed the impact of policies announced by the State Council yesterday. Hisense Electric Co., which makes flat-panel televisions, climbed 7.7 percent in Shanghai after the government said it will continue appliance trade-in subsidies beyond May 2010, when it had been set to expire.
Geely Automobile Holdings Ltd. tumbled 5.9 percent to
HK$4.34 in Hong Kong. BYD Co., the maker of batteries and cars in which Warren Buffett has a stake, lost 3.2 percent to HK$67.55. They are among Chinese automakers that will suffer from a higher sales tax on smaller vehicles, CLSA Asia-Pacific Markets said.

Tax Policies

China will charge a 7.5 percent sales tax on vehicles with engines of 1.6 liters or less through the end of 2010, according to a statement posted on the State Council’s Web site yesterday.
The government had halved the tax to 5 percent this year. The lower 5 percent tax is due to expire at the end of 2009.
While extending favorable policies for consumption, China’s government will impose a sales tax on homes sold within five years of their purchase, increasing the time period covered by the charge from two years, according to the State Council.
China Vanke retreated 1.3 percent to 11.88 yuan, and Shanghai Industrial Development Co. lost 1.8 percent to 16.32 yuan. Gemdale Corp. fell 1.4 percent to 15.58 yuan.
Hisense jumped 7.7 percent to 24.79 yuan. Hefei Rongshida Sanyo Electric Co., which makes washing machines, added 3.9 percent to 24.51 yuan. The government will extend subsidies for purchases of appliances, automobiles and farming equipment in rural areas, the State Council said.
In Taipei, Motech tumbled 6.9 percent to NT$135.50. The company agreed to sell a 20 percent stake to Taiwan Semiconductor at a 16.9 percent discount. Taiwan Semiconductor dropped 1.8 percent to NT$61.30.

Peso Rises

The Bloomberg-JP Morgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, rose 0.1 percent. The Philippine peso strengthened 0.5 percent to 46.125 per dollar after October trade data showed the smallest decline in exports for 13 months.
"The slump in exports is tapering off and we will probably see them back in the black starting this month and that’s helping the peso," said Rafael Algarra, treasurer at Security Banking Corp. in Manila.
Copper dropped for a sixth day, heading for the longest losing streak in almost a year, as investors turned their attention to swelling global inventories and concern the global economic recovery may stall.
The worst postwar recession halved copper prices in 2008 and boosted London Metal Exchange stockpiles by 35 percent this year. Inventories expanded for a 27th day yesterday to 458,500 metric tons, while those in Shanghai warehouses stood at 104,710 tons, more than six times the level at the start of the year.

Focus on Fundamentals

"The fundamentals have been brought back to focus as we approach the end of the year and money managers take money off the table to evaluate their investment decisions," said Yang Zhenqiang, First Futures Brokerage Co. analyst, from Tianjin.
Copper for delivery in three months on the London Metal Exchange lost as much as 1.1 percent to $6,872 a metric ton before trading at $6,824 at 2 p.m. Singapore time.
Gold for immediate delivery was little changed at $1,127.74 an ounce at 2:00 p.m. in Singapore.
Crude oil was little changed near $71 a barrel as the dollar pared losses against the euro, capping fresh buying in futures.
Crude oil for January delivery was at $70.77 a barrel, up 10 cents, in electronic trading on the New York Mercantile Exchange at 2:45 p.m. Singapore time. Yesterday, the contract fell 2.7 percent to $70.67 a barrel, the lowest settlement since Oct. 7. Futures have gained 58 percent this year.

Buying Level

Oil earlier rose, snapping a six-day decline, the longest since July, as investors took the view a drop below $72 a barrel made futures attractive to buy. The contract fell to a two-month low yesterday after a government report showed fuel stockpiles climbed in the U.S., the biggest energy consumer.
"The low $70s is definitely seen as a buying region for a lot of investors," Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, said by telephone. "If you’ve got any faith in the medium-term demand outlook, then it’s probably not a bad time to buy."