Asian Stocks Decline as Japanese Exporters Drop on Yen

Asian stocks retreated, with the regional benchmark index heading for its first monthly decline in seven months, as commodities fell and the yen traded near a three-week high.

Honda Motor Co. (7267), which gets 46 percent of sales from North America, slid 2.2 percent, on concern a stronger yen will damp the earnings outlook among Japanese exporters. BHP Billiton Ltd. (BHP), the world’s biggest mining company and Australia’s top oil producer, lost 1.3 percent after crude oil and copper futures dropped. National Australia Bank Ltd., the nation’s fourth-biggest lender, fell 0.3 percent, heading for an eighth day of decline, its longest losing streak since November 2010.

The MSCI Asia Pacific Index decreased 0.9 percent to 136.77 as of 10:19 a.m. in Tokyo, with all 10 industry groups falling on the gauge, which is poised to close at the lowest level since April 19. The measure is heading for a 3.8 percent decline this month as speculation grows that the Federal Reserve will reduce its bond purchases as the U.S. economy improves and amid signs of an economic slowdown in China.

“It’s difficult for the market to keep rallying,” said Angus Gluskie, managing director at White Funds Management in Sydney, who manages more than $400 million. “Apart from volatility caused by the currency and bonds, we are at a juncture where further moves from Japanese equities need to be fundamentally driven.”

Japan’s Topix fell 1.5 percent. The Nikkei 225 Stock Average sank 2 percent, poised for its lowest close since May 2. The yen climbed as much as 0.6 percent to 100.59 against the dollar, a level last seen on May 10, before trading at 101.32 as of 10:05 a.m. in Tokyo. A stronger yen cuts the value of overseas earnings at Japanese companies when repatriated.

(Source: Bloomberg)

Dollar Index Advances Before U.S. Growth Data, Aussie Declines

The Dollar Index rose for a second day before U.S. data tomorrow on first-quarter growth amid speculation the Federal Reserve will cut monetary stimulus.

The greenback held an advance versus the euro after Treasury yields (USGG10YR) climbed to a one-year high. The Australian dollar fell to the weakest level since October 2011 versus its U.S. counterpart. The yen rose as Japanese stocks pared gains.

“The dollar is strong,” said Marito Ueda, the senior managing director at FX Prime Corp. (8711), a currency-margin company in Tokyo. “The U.S. economy is steadily recovering, and a reduction in monetary easing appears to be coming into view.”

The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against currencies of six major U.S. trading partners, added 0.2 percent to 84.246 at 9:51 a.m. in Tokyo. It reached 84.498 on May 23, the most since July 2010.

The dollar was little changed at $1.2855 per euro after rising 0.6 percent yesterday. The yen strengthened 0.2 percent to 131.38 per euro and rose 0.2 percent to 102.21 per dollar. The Aussie dollar fell 0.5 percent to 95.69 U.S. cents, after dropping to 95.56, the weakest since Oct. 5, 2011.

The Topix (TPX) index of Japanese shares pared its advance to 1 percent from 2.1 percent.

Yields on 10-year Treasury notes jumped as much as 17 basis points yesterday to 2.18 percent, a level unseen since April 5, 2012. They fell one basis point to 2.15 percent today.

The U.S. Commerce Department is likely to say tomorrow the world’s biggest economy grew at an annualized 2.5 percent pace in the first quarter, according to the median forecast of economists surveyed by Bloomberg News. It would be unchanged from the preliminary reading released last month.

(Source: Bloomberg)

Gold Bets Reach Five-Year Low With Prices Whipsawed

Hedge funds are the least bullish on gold in more than five years as speculation about the pace of money printing by central banks whipsawed prices, driving volatility to a 17-month high.

Money managers cut their net-long position by 9 percent to 35,686 futures and options as of May 21, the lowest since July 2007, U.S. Commodity Futures Trading Commission data show. Holdings of short contracts rose 6.7 percent to a record 79,416. Net-bullish wagers across 18 U.S.-traded commodities slid 2.1 percent, as investors became more bearish on coffee and wheat.

Gold’s 60-day historical volatility touched the highest since December 2011 last week and a gauge of price swings for the SPDR Gold Trust, the biggest bullion-backed exchange-traded fund, surged 73 percent this year. Bullion see-sawed as Federal Reserve Chairman Ben S. Bernanke testified before Congress on May 22. Two days later, Bank of Japan Governor Haruhiko Kuroda said he’s done enough to spur growth.

“Gold has so many drivers that it leads to a lot of getting pushed around by one thing or another,” said Dan Denbow, a fund manager at the $1 billion USAA Precious Metals & Minerals Fund in San Antonio. “It makes it impossible to determine a direction.”

(Source: Bloomberg)

Dollar Index Rises to Almost 3-Year High Before Jobs, Home Data

The Dollar Index climbed to an almost three-year high before U.S. data forecast to show jobless claims decreased and home sales rose, adding to the case for the Federal Reserve to reduce monetary stimulus.

The greenback strengthened against all major peers and Treasury yields rose to the highest in two months after Fed Chairman Ben S. Bernanke said yesterday the central bank may taper monthly bond purchases if it’s confident of sustained gains in the economy. Australia’s dollar was slid to an 11-month low ahead of a report on China’s manufacturing.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against currencies of six U.S. trading partners, added 0.1 percent to 84.463 as of 9:59 a.m. in Tokyo. It earlier reached 84.467, the highest since July 2010, while 10-year Treasury yields climbed to as high as 2.07 percent, a level unseen since March 14.

The U.S. currency rose 0.3 percent to 103.49 yen and gained 0.2 percent to $1.2828 per euro. Europe’s 17-nation currency advanced 0.1 percent to 132.76 yen

(Source: Bloomberg)

Gold Swings as Investors Weigh Stimulus Outlook Amid ETP Decline

Gold swung between gains and losses as investors weighed the outlook for stimulus by the U.S. Federal Reserve amid further outflows in investor holdings.

Spot gold was little changed at $1,377.23 an ounce at 8:22 a.m. in Singapore, after rising and falling at least 0.2 percent. Prices retreated 1.3 percent yesterday.

Fed Chairman Ben S. Bernanke testifies in Congress today, and the central bank will publish minutes of its latest meeting. St. Louis Fed President James Bullard said yesterday the central bank should keep buying bonds and New York Fed President William Dudley said it had previously been overly optimistic about growth. Gold has tumbled 18 percent this year, dropping into a bear market last month, on expectations the Fed may scale back stimulus that helped the metal cap a 12-year bull run in 2012.

Bullion for June delivery was little changed at $1,376.20 an ounce on the Comex in New York after dropping for eight of the past nine days.

Assets in the SPDR Gold Trust, the biggest bullion-backed ETP, dropped to 1,023.08 metric tons yesterday, the lowest since February 2009, according to data on the company’s website. Total holdings in exchange-traded products backed by gold have fallen 17 percent this year, according to data compiled by Bloomberg.

(Source: Bloomberg)