Yen Gains, U.S. Equity Futures Decline Before Greek Debt Talks
January 28, 2012, 7:17 AM ESTBy Lynn Thomasson and Monami Yui
Jan. 27 (Bloomberg) -- The yen strengthened the most in a month against the dollar, while U.S. and European equity futures fell as bondholders were poised to resume talks with Greece. Crude oil and most industrial metals declined.
The yen advanced against all 16 major peers, increasing 0.5 percent to 77.05 per dollar as of 4:07 p.m. in Tokyo. Euro Stoxx 50 Index futures lost 0.5 percent and contracts on the Standard & Poor’s 500 Index slipped 0.1 percent. The MSCI Asia Pacific Index was little changed, poised for a sixth weekly advance. Copper fell 0.4 percent as metals retreated and oil slid 0.1 percent. The euro traded at $1.3112 following a four-day advance.
Talks on a Greek debt swap made some progress yesterday and continue today, said the Institute of International Finance which represents private creditors. A solution is “still a very open question,” Deutsche Bank AG Chief Executive Officer Josef Ackermann, who chairs the IIF, said yesterday in a Bloomberg News interview at the World Economic Forum in Davos, Switzerland.
“Uncertainty over the Greek situation is sending money into refuge currencies such as the yen,” said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow Ltd., which provides foreign-exchange margin-trading services. “That adds to the yen’s outperformance versus the dollar because of the Fed’s monetary easing.”
Treasury Yields
Ten-year Treasuries yielded 1.94 percent following a two- day rally. Five-year rates were little changed at 0.77 percent, versus the record low of 0.75 percent set yesterday. U.S. gross domestic product probably rose at a 3 percent annual rate in the fourth quarter after climbing 1.8 percent in the previous period, based on the median economist forecast in a Bloomberg survey.
Asian stocks gained as much as 0.4 percent earlier after Japan’s Prime Minister Yoshihiko Noda said he expects the central bank to take “bold” actions to address the yen’s strength. The MSCI gauge reached a three-month high yesterday after the Federal Reserve extended its pledge to keep interest rates low and said it was considering more bond purchases.
Nintendo Co. tumbled 4.1 percent. The world’s largest maker of video-game machines tripled its loss forecast as the success of rival Apple Inc. devices erodes demand for its 3DS player.
Hyundai Motor Co. and Kia Motors Corp. slumped at least 2.7 percent. South Korean’s two biggest automakers reported fourth- quarter profits that missed analysts’ estimates.
Korean Confidence
The Kospi Index gained 0.4 percent, while the Nikkei 225 Stock Average was little changed. Confidence among South Korean manufacturers was close to the lowest since July 2009, while Japan’s consumer prices fell for a third month, reports showed.
The yen rose 0.5 percent to 100.96 per euro from yesterday, when it advanced 0.4 percent. Japan’s currency is on course for a 1.4 percent weekly slide against Europe’s shared currency.
Copper fell for the first time in three days, retreating 0.4 percent to $8,553 a metric ton on the London Metal Exchange. Nickel and zinc fell at least 0.8 percent.
Industrial metals are heading for their best month since July 2009. The LME index of six metals has advanced 14 percent and is up 19 percent from the low in December, near the 20 percent increase that some analysts define as a bull market.
Natural gas futures fell for a second day after a government report showed the surplus of the heating and power- plant fuel expanded to the widest level in 31 months. The contract for February delivery declined 0.5 percent to $2.591 per million British thermal units.
--With assistance from Mariko Ishikawa in Tokyo. Editor: James Poole
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
