Most Asian Stocks Drop on Bernanke, Japan Stimulus; Yen Gains

Most Asian stocks fell after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy faces “formidable headwinds,” and Japan unveiled an $81 billion stimulus program.

The Nikkei 225 dropped 0.49 percent at 2:40 p.m. Tokyo time and the MSCI Asia Pacific Index gained 0.12 percent to 120.73. Malaysia’s ringgit gained 0.3 percent to 3.3877 per dollar and South Korea’s won traded near a 14-month high at 1,153.65.

While Bernanke said yesterday that the U.S. recovery would be restrained by a weak labor market and tight credit, Asian reports showed the region continues to emerge from the first global recession since World War II. Australian business confidence climbed to the highest level in more than seven years. Taiwan’s exports leapt 19.4 percent and Japan’s current-account surplus soared 43 percent from a year earlier.

“Generally, Bernanke was dovish,” said Gerrard Katz, head of currency trading at Standard Chartered Plc in Hong Kong. “If the data from the U.S. continues to improve, it’s going to be good for exports and I’d expect further pressure on the dollar against Asian currencies.”

U.S. index futures were little changed, with Standard & Poor’s 500 Index futures 0.2 percent higher. The S&P 500 erased gains yesterday as investors speculated the economy isn’t growing fast enough to shield banks from further losses.

“The economy confronts some formidable headwinds that seem likely to keep the pace of expansion moderate,” Bernanke said in a speech to the Economic Club of Washington.

Stocks Lower

About five stocks declined for every three that rose in the MSCI Asia index. Shipping lines declined the most among the 33 industry groups in the Topix after the Baltic Dry Index, a benchmark for commodity cargo rates, dropped for the first time in four days yesterday in London.

Nippon Yusen K.K. lost 6 percent to 266 yen, while Kawasaki Kisen Kaisha Ltd. retreated 5.4 percent to 264 yen, the two biggest declines in the Nikkei 225. Mitsui O.S.K. Lines Ltd., the operator of the world’s largest merchant fleet, slipped 4.1 percent to 494 yen.

China’s Shanghai Composite Index declined 1.3 percent, the most since Nov. 27. China Shenhua Energy Co. and Zijin Mining Group Co., the nation’s biggest producers of coal and gold, retreated more than 1 percent. Jiangxi Copper Co., China’s biggest producer of the metal, sank 1.5 percent in Shanghai.

“Commodity stocks need a break now as the pick-up in demand amid the economic recovery has already been priced in,” said Chen Wenzhao, a strategist at China Merchants Securities Co. in Shanghai.

The yen rose for a second day against the euro, climbing to 132.00 in Tokyo from 132.71 yesterday in New York and to 88.94 per dollar from 89.51.

Japan Plan

Japan’s 7.2 trillion yen spending plan includes 3.5 trillion yen ($39.3 billion) to help regional economies, 600 billion for employment and 800 billion for environmental projects. The government is battling falling prices and the surging yen, which strengthened 17 percent from its low in March.

Asian bonds rallied. The yield on South Korea’s 5 percent note due September 2014 fell five basis points to 4.71 percent, according to Korea Stock Exchange. The yield on the Philippine government’s 10-year bond fell 10 basis points to 7.65 percent.

Taiwan’s exports jumped from a year earlier last month, compared with a 4.7 percent decline in October, the Ministry of Finance said in Taipei late yesterday. Japan’s current-account surplus rose to 1.4 trillion yen in October as a decline in exports eased, the Ministry of Finance said in Tokyo today.

A business sentiment index in Australia climbed 3 points to 19, the most since May 2002, according to a National Australia Bank Ltd. survey of more than 540 companies questioned between Nov. 23 and Nov. 27, and released in Sydney today. A figure above zero shows optimists outnumber pessimists.

Recovery Under Way

“We still remain confident that the recovery’s under way,” said Matt Riordan, who helps manage $5.1 billion at Paradice Investment Management in Sydney. “The companies we’re talking to are seeing signs of things improving. The big question from where we sit now is the speed by which it happens.”

Commodities from gold and copper to corn gained as the Dollar Index that measures the currency against six major trading partners fell 0.1 percent, dropping for a second day. Gold increased for the first time in four days, rising 0.7 percent to $1,166.70 an ounce. That was still down 4.9 percent from its record $1,226.56 an ounce on Dec. 3.

Copper, used in homes and cars, increased 0.7 percent to $7,047 a metric ton on the London Metal Exchange. Corn was up 1 percent at $3.8750 a bushel.

Crude oil rose for the first time in five days, gaining as much as 0.6 percent to $74.39 a barrel in New York as the dollar weakened and some investors took the view a decline below $75 made it an attractive investment.

Oil recouped some of yesterday’s 2 percent loss, made after Bernanke’s comments on the pace of the U.S. economic recovery raised concern fuel demand won’t recover rapidly in the world’s largest energy user.

“Markets had for a while started to get used to the $75 to $80 a barrel range for oil, and the move to the lower part of that range is probably attracting some buying,” David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said by telephone.