May 23 (Bloomberg) --
"Asian stocks and commodities fell, while the Dollar Index rose to a 20-month high amid speculation that Greece may leave the euro and slower-than-estimated growth in Japan underscored weakness in global demand. The yen gained after the Bank of Japan refrained from adding monetary stimulus.
The MSCI Asia Pacific Index dropped 1.5 percent by 12:31 p.m. in Tokyo, erasing gains in the past two days. Standard & Poor’s 500 Index futures lost 0.5 percent. The Dollar index advanced 0.3 percent. The yen climbed against all of its major counterparts, while gold and oil both fell 0.6 percent and copper declined 0.9 percent.
Greece’s former Prime Minister Lucas Papademos said that while it is unlikely the nation will leave the euro, it’s still a risk, according to a report in the Wall Street Journal yesterday. European leaders are meeting in Brussels today to discuss the region’s debt crisis that has wiped more than $4 trillion from equity markets worldwide this month. Japan’s exports in April trailed economists estimates, underscoring the risk that weakness in global demand may limit the rebound in the world’s third-biggest economy.
“The comments watered down optimism ahead of the European summit,” said Kim Young Sung, a fund manager in Seoul at Samsung Asset Management, which manages $98.3 billion. “There is uncertainty whether the actions being offered by the EU today will prevent the Greek exit.”
Technology Stocks
Five stocks fell for every one that gained on the MSCI Asia Pacific Index. Technology-related companies fell 2 percent, leading losses in all 10 industry groups in the equity benchmark after Dell Inc. forecast fiscal second-quarter revenue thatmissed analysts’ estimates. Compal Electronics Inc., a laptop maker for Dell, sank 3.6 percent to NT$30.85 in Taipei. Wistron Corp. slid 2.8 percent to NT$39.90.
Hong Kong’s Hang Seng Index declined 1.7 percent, Australia’s S&P/ASX 200 fell 1.1 percent and South Korea’s Kospi Index lost 1.3 percent. Myer Holdings Ltd., Australia’s largest department-store chain, tumbled 6.2 percent in Sydney trading after cutting its profit forecast.
In Japan, exports grew 7.9 percent last month from a year earlier, compared with the median estimate for an 11.8 percent gain in a Bloomberg News survey. Fitch Ratings cut the nation’s rating to A+ yesterday with negative outlook, citing “high and rising public debt” burden.
Japan’s currency gained 0.5 percent to 79.53 per dollar after the central bank left the fund at 40 trillion yen ($501 billion) and a credit-lending program at 30 trillion yen. All 14 economists surveyed by Bloomberg News forecast that outcome. The policy board kept the key overnight lending rate between zero and 0.1 percent.
Aussie, Kiwi
The Australian dollar traded at a six-month low of 97.63 cents and the so-called kiwi reached 75.16 cents, a level not seen since mid-December. South Korea’s won retreated 0.8 percent to 1,172.18 per dollar.
The cost of insuring Asia-Pacific corporate and sovereign bonds from default rose, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan advanced 5.5 basis points to 198 basis points, Credit Agricole SA prices show. The index reached a four-month high of 200.3 on May 18, according to data provider CMA. "
To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net "
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