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Monday, December 27, 2010

Currencies Climb on Japan Output Data Copper Rises to Record; Asia Stocks

Currencies Climb on Japan Output Data Copper Rises to Record; Asia Stocks ; Asian stocks and currencies gained and copper rallied to a record high as data in Japan and the U.S. signaled a sustained global recovery. Chinese shares declined on concern the central bank will further raise interest rates.

The MSCI Asia Pacific Index added 0.2 percent to 135.66 as of 11:52 a.m. in Tokyo, set for the highest close since July 2008. Gains were limited by a drop in the Hong Kong and Shanghai markets. Standard & Poor’s 500 Index futures rose 0.1 percent. South Korea’s won climbed to a two-week high against the dollar. Copper climbed as much as 0.6 percent to $4.3075 a pound in New York, while oil was near a two-year high.

Japanese industrial production increased for the first time in six months in November, while U.S. retailers reported a 5.5 percent jump in 2010 holiday sales, the best performance in five years. Data today may show consumer confidence in the world’s biggest economy improved this month while home prices fell in October, a sign that housing is the weak link.

“Markets are convinced that the U.S. recovery is really on track,” said Danny Yan, a Hong Kong-based fund manager at Haitong International Asset Management, which oversees about $400 million. “The global economy is recovering, but as a backdrop there’s the China overheating concern because it’s still unable to be controlled.”

Samsung Electronics Co., which gets about 83 percent of its sales outside South Korea, jumped 2.4 percent, leading gains among exporters. Mizuho Financial Group Inc. rose 2 percent after saying it will exceed international capital requirements without selling shares.

Inflation, Interest Rates

China Resources Land Ltd. fell 2.7 percent, pacing a 0.9 percent decline in the Hang Seng Index as Hong Kong’s stock market reopened after a holiday. The Shanghai Composite Index slid 0.7 percent, adding to a 1.9 percent drop yesterday after the People’s Bank of China boosted its key one-year lending and deposit rates by 25 basis points over the weekend.

Consumer prices in the nation may rise more than 5.5 percent in January, the 21st Century Business Herald reported, citing Liu Yuhui, a researcher. The newspaper also cited Li Daokui, a central bank adviser, as saying more adjustments in China’s deposit rate, lending rate, and reserve requirement ratio are “very necessary” in 2011, especially in the first half.

Yuan forwards strengthened to a five-week high on speculation policy makers will allow faster currency gains to curb inflation. Twelve-month non-deliverable forwards rose 0.1 percent to 6.4727 per dollar, reflecting bets the currency will strengthen 2.4 percent from the spot rate of 6.6274, according to data compiled by Bloomberg.

Taiwan’s Dollar

Taiwan’s dollar rose to a 13-year high, gaining 3.1 percent to NT$29.508, even after the central bank curbed trading in derivatives. Banks’ holdings of non-deliverable forwards and options in the Taiwan dollar will be limited to 20 percent of their positions from around 33 percent previously.

In Japan, factory output climbed 1 percent from October, increasing for the first time in six months, the Trade Ministry said today. Consumer prices excluding fresh food declined 0.5 percent from a year earlier while the unemployment rate held steady at 5.1 percent, according to other reports released today.

“Today’s economic data was overall good and it affirmed that the economy is recovering,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion. “It’s important to keep taking appropriate measures to combat deflation in order to attract investment to Japan.”

Confidence, Housing

The Conference Board’s U.S. consumer confidence index increased to 56.4 this month from 54.1 in November, according to the median estimate of economists surveyed by Bloomberg News before the data today. The S&P/Case-Shiller Index of property values dropped 0.2 percent in October from a year earlier, the first decline since January, according to a separate survey.

The dollar dropped 0.5 percent to $1.3233 per euro, the most in two weeks, and fetched 82.70 yen from 82.81 yen. Treasuries snapped a gain from yesterday, with yields on the benchmark 10-year note climbing two basis points to 3.35 percent. The government is preparing to sell $35 billion of five-year notes today and $29 billion of seven-year securities tomorrow.

Copper for March-delivery traded at $4.3010 a pound on the Comex in New York after earlier reaching the highest price ever for a most-active contract. Soybeans gained as much as 0.7 percent to a 28-month high of $13.94 a bushel on the Chicago Board of Trade, fueled by concern dry weather in Argentina will spread to parts of Brazil, hurting crops in the world’s largest exporters after the U.S.

Oil rose 0.2 percent to $91.20 a barrel in New York, retracing some of yesterday’s 0.6 percent pullback before an Energy Department report this week that will show U.S. inventories dropped for a fourth week, the longest stretch of declines in a year, a Bloomberg News survey showed. For the latest updates PRESS CTR + D or visit Stock Market news Today

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