Asian Stocks, Currencies Fall on Outlook for Economic Recovery

By Linus Chua and Chan Tien Hin
Feb. 4 (Bloomberg) -- Asian stocks and currencies fell on concerns the region’s economic recovery may be derailed after Australian retail sales unexpectedly fell and New Zealand’s jobless rate rose to the highest level in more than 10 years.
The MSCI Asia Pacific Index lost 0.9 percent to 117.44 as of 5:05 p.m. in Tokyo. The Australian dollar dropped to a six- week low, the New Zealand currency slid to the weakest since September, and South Korea’s won declined for the first time in three days. Futures for the Standard & Poor’s 500 Index fell 0.3 percent. The Dow Jones Stoxx 600 rose 0.1 percent to 249.61.
Australian retail sales decreased for the first time in five months and New Zealand’s unemployment soared to 7.3 percent in the fourth quarter. The data raised investors’ concerns that the Asian benchmark stock index’s 34 percent gain last year won’t be sustained as economic growth slows.
"Blips that pour cold water on growth expectations, such as today’s Aussie retail sales numbers, are enough to make investors run to the sidelines to wait for a firmer trend to develop," said Geoffrey Ng, who manages $1 billion of assets as chief executive officer at HLG Asset Management Sdn. in Kuala Lumpur. "Real economies are stabilizing, but asset prices are rich. We are in for a shaky first half of the year."
Japan’s Nikkei 225 Stock Average dropped 0.5 percent and Hong Kong’s Hang Seng Index declined 1.7 percent. Australia’s S&P/ASX 200 Index slipped 0.6 percent. BHP Billiton Ltd., the nation’s biggest oil producer and the world’s biggest mining company, dropped 1.2 percent. Rio Tinto Ltd., the world’s third- biggest mining company, lost 2.6 percent.

Toyota, Honda

Toyota Motor Corp. fell 3.5 percent after Bloomberg News reported that the Prius hybrid may be recalled in Japan after the government ordered an investigation of brake problems.
Outside of Japan, nearly 8 million Toyota vehicles have been recalled to fix problems linked to unintended acceleration.
Rival Honda Motor Co. rose 2.6 percent as it increased its full- year profit forecast by 71 percent because of a weaker yen.
Australia’s dollar fell 0.2 percent to 88.13 U.S. cents, while the New Zealand dollar declined as low as 69.64 U.S. cents.
The won dropped 0.3 percent to 1,153.15 per dollar.
"Signals remain mixed about the strength of economic recovery," said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne. "A tug of war seems to be occurring between fundamentals and liquidity at the moment."

Dollar, Treasuries Gain

The dollar and Treasuries gained as concern European sovereigns will struggle to reduce deficits and the economic recovery in Asia will slow boosted demand for the safest assets.
The greenback advanced against the euro and the yen strengthened against 11 of its 16 most-traded counterparts following economic data from Australia and Zealand, boosting demand for Japan’s currency as a refuge.
The dollar climbed to as high as $1.3867 per euro in Tokyo from $1.3893 in New York yesterday. The benchmark 10-year Treasury note yielded 3.70 percent, according to BGCantor Market Data.
Copper for three-month delivery advanced 0.5 percent to $6,620 a metric ton after slumping 3.3 percent yesterday. The metal used in homes, cars and appliances dropped to $6,525 a ton yesterday, the lowest level since Nov. 13. Aluminum increased
0.2 percent to $2,088 a ton.
Crude oil traded near $77 a barrel in New York after dropping yesterday on a U.S. Energy Department report that showed a bigger-than-forecast increase in inventories as refineries idled units and imports climbed. Crude oil for March delivery traded at $76.61 a barrel, down 38 cents, in electronic trading on the New York Mercantile Exchange.