Asian stocks decline

GLOBAL MARKETS

Asian stocks fell from a nine-month high, led by Toyota Motor Corp on speculation the Group of Seven nations will press for a stronger yen, eroding the value of sales for exporters. China's shares extended a week-long slump.

"The market is worried that G-7 ministers will demand that the Bank of Japan raise interest rates and bring an end to the weak yen,'' said Tomokatsu Mori, who helps oversee $7.4 billion at Fukoku Capital Management in Tokyo.

China's shares dropped after official media said the state will crack down on banks that approve loans used to trade equities. Nissan Motor Co slid the most in more than five years after cutting its profit forecast by 12 per cent. BHP Billiton led mining stocks lower after copper and zinc prices tumbled.

The Morgan Stanley Capital International Asia-Pacific Index fell 0.6 per cent to 141.83 as of 6:01 pm in Tokyo. Woodside Petroleum led a measure of energy-related shares up 0.8 per cent after oil prices climbed to the highest in a month.

In Japan, the region's biggest market by value, the Nikkei 225 Stock Average lost 1.2 per cent to 17,344.80, while the broader Topix index declined 1.5 per cent. Australian stocks slid from a record, while benchmarks also fell in China, Hong Kong and Indonesia. Singapore's Straits Times Index set a new high.

Toyota, which reports its third-quarter earnings tomorrow, dropped 1.6 per cent to 7,820 yen. Honda Motor Co, Japan's No 2 carmaker by sales, fell 3.6 per cent to 4,530 yen.

The yen has gained against 13 of the 16 most-active currencies over the past five days after officials from France and Germany last week said its value doesn't reflect economic fundamentals.

Luxembourg Finance Minister Jean-Claude Juncker, who chairs a group of counterparts from the euro nations, said he wanted to say "more forcefully'' that the yen should reflect Japan's economic recovery. The G-7 meeting, which Junker will be attending, will take place on February 9-10 in Essen, Germany.

The yen advanced to 120.65 recently against the dollar from 121.11 late in New York on February 2. It climbed to 156.34 to the euro from 156.92. Yen gains erode the value of Japanese companies' overseas sales when converted into local currency.

China Minsheng Banking Corp, the country's first privately controlled lender, dropped 5.8 per cent to 10.84 yuan. Shanghai Pudong Development Bank Co, part-owned by Citigroup, lost 5.7 per cent to 21.70 yuan.

The China Banking Regulatory Commission said it will punish banks that approve loans used to trade stocks, state-run Xinhua News Agency said yesterday. The banking watchdog said the clampdown is scheduled to start February 26, when trading resumes after the week-long Lunar New Year holiday.

The Shanghai and Shenzhen Composite Index has tumbled 12 per cent in the past week after lawmaker Cheng Siwei, vice-chairman of the National People's Congress, said mainland-listed stocks are overvalued.

"That's an alarm sounded by the regulators that stocks are already overvalued and now the government wants to cool it down,'' said Zhao Zifeng, who oversees about $1.1 billion at China International Fund Management Co in Shanghai.

Nissan slumped 8.4 per cent to 1,383 yen, its biggest decline since September 21, 2001.

On February 2, Japan's third-largest automaker cut its annual profit forecast 12 per cent to 460 billion yen ($3.79 billion), citing higher raw-material costs and a lack of new models. Chief Executive Officer Carlos Ghosn said the automaker is developing an emergency plan to improve performance, including management changes, to be announced in April.

"When Ghosn took over, things were getting worse, and now they are getting worse again,'' said Edwin Merner, who oversees $1 billion as president of Atlantis Investment Research Corp in Tokyo. "Monthly sales figures have been bad for a long time.''

Nippon Telegraph & Telephone Corp dropped 2.4 per cent to 610,000 yen. Japan's former telephone monopoly last week lowered its forecast for operating profit, or sales minus the cost of goods sold and administrative expenses, by 7.7 per cent to 60 billion yen at NTT East and 14 per cent to 19 billion yen at NTT West.

Korea Zinc Co, the world's biggest smelter of the metal, dropped 3 per cent to 83,900 won. Zinifex, the world's second-biggest zinc producer, lost 4.8 per cent to A$15.99.

A measure of six metals traded on the London Metal Exchange, including copper and zinc, slumped 2.9 per cent. Zinc plummeted 9.1 per cent, the biggest drop since July 1997. Copper tumbled 4.6 per cent, earlier reaching the lowest since March 27. In New York, copper fell 4.3 per cent.