The dollar climbed, rising to its strongest level in more than seven years versus the yen. European stocks fell with U.S. equity-index futures, while nickel advanced as Indonesia reiterated a ban on ore exports.
The greenback added 0.4 percent to 118.43 yen by 8:16 a.m. in London, after touching its highest level since Aug. 9, 2007. Standard & Poor’s 500 Index futures lost 0.2 percent after the measure fell from a record. The Stoxx Europe 600 Index (SX5E) dropped 0.3 percent. Australia’s S&P/ASX 200 Index (AS51) erased the year’s gain as miners and the local dollar tumbled after a gauge of China’s manufacturing hit a six-month low. Nickel declined 1.1 percent in London and gold advanced 0.5 percent.
The Bank of Japan yesterday maintained record stimulus after the economy slipped into recession while in the U.S., Federal Reserve policy makers discussed how to communicate the pace of interest-rate increases after they lift off zero. China’s flash purchasing managers’ index from HSBC Holdings Plc and Markit Economics fell to 50, the borderline between expansion and contraction while a similar gauge in France also missed estimates.
“While the focus is on when the U.S. will raise rates, Japan continues to ease,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo, said by phone. More confirmation of the divergence in policy “pushed the yen to 118 against the dollar, and large cap stocks are likely to rise,” he said.
Japan’s currency weakened as much as 0.9 percent to 118.98 per dollar today, and slipped to 149.14 per euro, the least since October 2008. The Topix index finished little changed with the Nikkei 225 Stock Average. Yields on Japan’s two-year notes neared negative levels.
Diverging Outlooks
Prime Minister Shinzo Abe has called an early election and put off an increase to the country’s sales tax as he seeks to salvage his reform program.
The Bloomberg Dollar Spot Index climbed 0.1 percent as the U.S. currency gained against most peers. The euro was little changed at $1.2552.
Most of the 19 groups on the Stoxx 600 fell today, led by resources firms after BHP Billiton Ltd. (BHP) and Rio Tinto Ltd., the world’s two largest mining companies, closed Sydney trading at their lowest levels in more than a year. The S&P/ASX 200 Index dropped 1 percent in Sydney, while Australia’s dollar slid 0.4 percent to 85.85 U.S. cents.
ThyssenKrupp AG climbed 1.9 percent after Germany’s largest steelmaker reported the first annual profit in four years after selling a U.S. plant that was part of the 203-year-old company’s worst investment.
Won Rout
South Korea’s won depreciated as much as 1 percent today to 1,117.07 per dollar, its weakest intraday price since August 2013, amid concern the yen’s slump makes Japanese exporters more competitive. The Korean currency has weakened during 14 of the past 16 days. Only the yen has recorded a worse performance among Asian currencies tracked by Bloomberg this year.
China’s PMI report was forecast to deliver a preliminary reading of 50.2 for November, down from 50.4 in the previous month, according to economists surveyed by Bloomberg. With fixed-asset investment expanding the least since 2001 and credit growth weakening, the result shows the government may need to do more to support growth amid concerns about increasing bad loans and declining real-estate prices.
Hong Kong’s Hang Seng Index dropped 0.1 percent for a fourth day of decline, and a gauge of Chinese shares in the city erased gains into the close. The Shanghai Composite Index swung between gains and losses today.
Cnooc Ltd. (883), China’s biggest offshore oil producer, rose 2 percent after closing at its lowest level since February 2010 yesterday. PetroChina Co., Asia’s largest oil company, climbed 0.8 percent. A gauge of energy producers has slumped more than twice as much as any other group in the MSCI Asia Pacific Index (MXAP) this quarter as oil entered a bear market.
Gold climbed to $1,187.79 while platinum increased 0.2 percent to $1,193.63 an ounce and palladium added 0.2 percent to $765.50.
To contact the reporters on this story: Emma O’Brien in Wellington at eobrien6@bloomberg.net; Nick Gentle in Hong Kong at ngentle2@bloomberg.net
To contact the editors responsible for this story: Nick Gentle at ngentle2@bloomberg.net Michael Patterson
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