Asia Stocks Fall a Fourth Day as BOJ Refrains From More Easing

May 21, 2014 7:14 am ET

May 21 (Bloomberg) -- Asian stocks fell for a fourth day, with the regional benchmark index posting its longest losing streak since January, as the yen strengthened and the Bank of Japan refrained from adding to monetary stimulus.

Raw-material suppliers retreated, with Fortescue Metals Group Ltd. losing 2.4 percent in Sydney after benchmark prices for iron-ore delivered to China’s Tianjin port dropped to the lowest since 2012. Mazda Motor Corp. fell 2.4 percent as the yen traded near its strongest level in more than three months. Japan Petroleum Exploration Co. led energy suppliers higher, jumping 8 percent, after its stock rating was raised by SMBC Nikko Securities Inc.

The MSCI Asia Pacific Index slipped 0.1 percent to 138.93 as of 7:12 p.m. in Hong Kong. The gauge dropped the past three days amid concern about the pace of global growth after valuations on the measure last week touched a six-week high.

“Markets are experiencing a fresh bout of risk aversion,” said Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., which manages about $29 billion. “There was scant new regional data on the economic and earnings front, which means justifying current valuations is the main concern for investors.”

Japan’s Topix index slid 0.3 percent as the yen rose. The yen strengthened to 101.06 to the dollar after the Tokyo bourse closed. Mazda sank 2.4 percent to 411 yen. Canon Inc., a camera maker that gets more than half of its sales outside Japan, retreated 1.3 percent to 3,296 yen.

Trade Deficit

The nation posted a trade deficit of 808.9 billion yen ($8 billion) for April, data showed today. Economists surveyed by Bloomberg had predicted a 646.3 billion yen shortfall. Exports gained 5.1 percent year on year, while imports increased 3.4 percent, both topping expectations.

The BOJ refrained from boosting stimulus as the economy shows signs of weathering the impact of the first sales-tax increase since 1997. The central bank will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen per year, it said in a statement today in Tokyo, in line with forecasts of all 32 economists in a Bloomberg News survey.

The BOJ’s monetary stimulus and government spending by Prime Minister Shinzo Abe drove a world-beating 51 percent jump in the Topix last year. The measure has fallen 12 percent in 2014, the largest decline among 24 developed markets tracked by Bloomberg, amid concern the stimulus measures won’t be enough to revive the economy and generate inflation.

Confidence Slumps

Australia’s S&P/ASX 200 Index added 0.1 percent. South Korea’s Kospi index slipped 0.1 percent and New Zealand’s NZX 50 Index fell 0.5 percent. Singapore’s Straits Times Index slid 0.1 percent, and India’s S&P BSE Sensex Index slipped 0.3 percent.

The Hang Seng China Enterprises Index of mainland Chinese equities listed in Hong Kong surged 1.1 percent and the Shanghai Composite Index climbed 0.8 percent as speculation that state- linked investors are buying equities offset concern that the economy is slowing. Hong Kong’s Hang Seng Index closed little changed and Taiwan’s Taiex Index lost 0.3 percent.

Futures on the Standard & Poor’s 500 Index added 0.2 percent today after the U.S. benchmark gauge fell 0.7 percent yesterday.

The Asia-Pacific gauge traded at 12.7 times estimated earnings yesterday, compared with 15.9 for the S&P 500 and 15.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Mining companies sank. Fortescue Metals retreated 2.4 percent to A$4.43. BHP Billiton Ltd. sank 0.8 percent to A$37.17 and Rio Tinto Group declined 1.1 percent to A$59.40. The spot price of iron ore at China’s Tianjin port fell 1 percent yesterday to $97.50 a dry metric ton, the lowest level since September 2012, according to data from The Steel Index Ltd.

Wine Takeover

Treasury Wine Estates Ltd. climbed 5.6 percent to A$5.07. The world’s second-largest listed wine company rose a second day amid speculation the Melbourne-based maker of Penfolds Grange will attract higher offers after rejecting a takeover from KKR & Co.

Lenovo Group Ltd. gained 3.4 percent to HK$9.44 in Hong Kong after the world’s largest maker of personal computers reported an increase in full-year profit.

Japan Petroleum rose 8 percent to 4,200 yen as SMBC upgraded the shares, citing contributions from overseas and curbs on exploration costs.

Great Wall Motor Co. advanced 3.5 percent to HK$29.65 in Hong Kong. Shares of the sport-utility vehicles maker have risen since it said May 19 that it would set up a vehicle production base in Russia.