Asian stocks declined, led by the biggest slump in Japanese shares in almost six weeks, after the yen strengthened and as US manufacturing weakened and Google posted disappointing earnings.
The MSCI Asia Pacific Index lost 0.8 per cent to 115.84 in Tokyo and Japan's Nikkei 225 Stock Average tumbled 2.3 per cent. Standard & Poor's 500 Index futures fell 0.1 per cent. The yen gained versus all 16 of its major counterparts and rose toward the strongest level this year.
Asian markets slid after a Federal Reserve report showed factory output fell 0.4 per cent in June and as Google reported lower-than-estimated earnings. Shares of Japanese exporters dived as the yen appreciated, reducing their overseas earnings.
''Investors are reacting to the negative data that point to some slowdown in economic activity,'' said Chu Moon Sung, a fund manager at Shinhan BNP Paribas Asset Management in Seoul, which manages $US26 billion.
Almost three stocks retreated for each that gained among the MSCI index's 985 companies. Nintendo dropped 3.4 per cent to five-week low after its US sales fell by a third in June. Sony and Nissan also declined more than 2 per cent as the yen headed for a 1.6 per cent gain this week. The Japanese currency traded at 87.20 per dollar from 87.40 in New York yesterday, after climbing to 87.17, approaching this year's high of 86.97 set on July 1.
Goldman settlement
Stocks fell in the US yesterday before staging a rebound in the final hour of trading. Losses were limited as Goldman Sachs Group agreed to a $US550 million settlement with the Securities and Exchange Commission, the Senate passed a financial-industry regulation measure and BP said it stopped the flow of oil at its leaking well in the Gulf of Mexico for the first time since April. The S&P 500 rose 0.1 per cent.
Goldman Sachs surged 4.4 per cent. That helped overshadow the 4 per cent decline in Google after it reported profit excluding some items of $US6.45 a share in the second quarter. Analysts estimated $US6.52 a share, based on a Bloomberg survey.
Agricultural Bank of China shares climbed 1.9 per cent on its first day of trading in Hong Kong. The stock fell 0.7 per cent in Shanghai, erasing yesterday's gains that marked the smallest first-day advance among the nine lenders that have sold shares in the city. CapitaMalls Malaysia Trust, the nation's second-biggest real estate investment trust that also debuted for the first time today, fell 2 per cent.
Consumer prices
New Zealand's dollar dropped 1.2 per cent to 72.08 US cents from 72.75 cents after Statistics New Zealand said consumer prices rose 0.3 per cent in the first quarter. That's smaller than the median estimate of a 0.4 per cent gain in a Bloomberg survey of 15 economists, giving central bank Governor Alan Bollard room to raise interest rates at a gradual pace.
The US is scheduled to release its consumer price index today, which may show a 0.1 per cent decrease compared with May, according to the median estimate of economists surveyed by Bloomberg. A separate report may also show US household sentiment deteriorated this month.
Reports yesterday also showed producer prices declined 0.5 per cent in June following a 0.3 per cent drop the month before and factories pulled back in the Philadelphia and New York regions this month.
''The market is becoming increasingly worried about downside risks to the US economy,'' said Toshiya Yamauchi, a senior foreign-exchange analyst in Tokyo at Ueda Harlow.