Asian stocks fell for the first day in five and the yen gained on concern the pace the global recovery may slow. The New Zealand dollar slumped as the central bank said deteriorating prospects for growth will taper the pace of future interest-rate increases after it raised its benchmark.
The MSCI Asia Pacific Index dropped 0.2 per cent to 119.25 in Tokyo after the US Federal Reserve said growth eased in some areas of the world's largest economy. Futures on the US Standard & Poor's 500 were little changed. Asia-Pacific bond risk rose as commodities including copper fell.
US economic growth slackened in some areas over the past two months, dragged down by commercial real estate and the expiration of a tax credit for homebuyers, the Fed said yesterday in its Beige Book business survey. US economic growth slowed to an annual rate of 2.5 per cent last quarter, from 2.7 per cent the prior three months, according to a Bloomberg survey before a Commerce Department report tomorrow.
''The Beige Book confirmed business sentiment is worsening,'' said Mitsushige Akino, who oversees the equivalent of $US450 million in assets at Ichiyoshi Investment Management. ''People are waiting for the Fed's next step.''
Two shares declined for every one that rose on the MSCI Asia index. The Nikkei 225 Stock Average fell 0.5 per cent. Advantest, a maker of memory-chip testers that gets almost 80 per cent of its revenue overseas, slumped 3.9 per cent as the yen climbed.
Panasonic slumps
Panasonic tumbled 5.4 per cent. There's concern the electronics maker will need to raise capital to buy the shares of Sanyo and Panasonic Electric Works it doesn't own, three people familiar with the matter said. Sanyo surged 26 per cent. NEC lost 3.3 per cent as Japan's largest maker of personal computers said its first-quarter loss widened.
Australia's S&P/ASX 200 Index declined 0.5 per cent as Woodside Petroleum, the country's second-largest oil and gas producer, dropped 1 per cent.
''As economies in the US and Europe lose momentum, the negative impact may reach other regions,'' said Soichiro Mori, a general manager at FXOnline Japan, a margin-trading company. ''Growth-sensitive currencies may drop against the yen.''
The yen, which typically appreciates in times of financial turmoil, strengthened against all its 16 major counterparts. The Japanese currency rose to 113.35 per euro from 113.66 yesterday, and gained to 87.23 per dollar from 87.47.
Kiwi weakens
New Zealand's dollar also weakened against all its major counterparts after central bank Governor Alan Bollard said that the ''pace and extent'' of future rate increases would be more moderate than projections he made in June. The official cash rate was boosted by a quarter percentage point to 3 per cent.
Three-month copper futures in London declined as much as 0.6 per cent to $US7126 a metric ton. Crude oil traded near a one-week low in New York on an unexpected increase in US supplies as imports jumped to the highest level in almost four years.
''We saw inventory builds at a time when we didn't expect them to rise,'' Jonathan Barratt, managing director at Commodity Broking Services in Sydney said. ''The fundamental story is not clear.''
The cost of protecting Asia-Pacific bonds from non-payment increased, according to traders of credit-default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan rose 2 basis points to 117 basis points, according to Credit Agricole.
Chinese manufacturing data due next week could jolt global markets by showing the first contraction in 17 months, according to analysts at Societe Generale and Westpac.
Seasonal factors mean there is a ''tangible risk'' the government-backed Purchasing Managers' Index for July will slip to less than 50 for the first time since February 2009, said Glenn Maguire, chief Asia economist at Societe Generale.