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Asia stocks fall as Japan shares dragged lower by yen strength
[SDYNEY] Asian stocks fell, led by Japanese shares, after the yen and gold climbed as the Swiss central bank's unexpected scrapping of its currency cap spurred a flight to haven assets.
The MSCI Asia Pacific Index declined 0.1 per cent to 138.59 as of 9:00 am in Tokyo, before markets opened in Hong Kong and China. Japan's Topix index tumbled 1.6 per cent as the yen traded near a one-month high at 116.22 per dollar, after gaining 1 per cent yesterday. Futures on the Standard & Poor's 500 Index dropped 0.5 per cent.
The Swiss National Bank abolished a minimum exchange rate against the euro designed to shield the economy from the region's sovereign-debt crisis. The franc was at 99.345 centimes per euro, after soaring as much as 41 per cent yesterday in one of the biggest moves among major currencies since the collapse of the Bretton Woods system in 1971.
"The SNB caught almost everyone by surprise and it's creating unease and anxiety in markets," Nader Naeimi, who helps manage about US$125 billion as Sydney-based head of dynamic asset allocation at AMP Capital Investors, said by phone. "The strategy is capital preservation for now, buying gold to hedge against the volatility which is going to continue." The euro area reports final December inflation figures today, amid speculation policy makers will boost stimulus. Citigroup Inc. and Bank of America Corp. joined JPMorgan Chase & Co. in posting the worst combined quarterly trading revenue since 2011.
Australia's S&P/ASX 200 Index slipped 0.2 per cent and South Korea's Kospi index retreated 0.5 per cent. New Zealand's NZX 50 Index declined 0.1 per cent.
The S&P 500 fell 0.9 per cent, a fifth day of losses, as banks and Best Buy. slid after corporate earnings disappointed. After going through all of 2014 without a losing streak of more than three days, the S&P 500 completed its second slide of five straight days. The benchmark gauge is down 3.4 per cent over the past five days.
Intel, the world's largest maker of PC chips, forecast first-quarter sales that may fall short of analysts' estimates amid concern that consumers aren't returning to the personal-computer market.