Yen Set for 11th Weekly Loss, Japan Stocks Rise; Samsung Falls

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The yen fell, set for the longest weekly losing streak in more than four decades, after consumer prices declined, supporting policy makers devaluing the currency. Japanese stocks rallied while shares of Samsung (005930) Electronics Co., the biggest weighting in the region’s benchmark index, slumped.

The yen dropped 0.1 percent to 90.46 per dollar at 2:30 p.m. in Tokyo, set for the 11th week of losses, the longest streak in data going back to 1971. The Nikkei 225 Stock Average (NKY) jumped 2.3 percent. Samsung fell 2.9 percent, limiting gains in the MSCI Asia Pacific Index to 0.1 percent. Futures on the Standard & Poor’s 500 Index slipped 0.2 percent. South Korea’s won and Malaysia’s ringgit declined 0.3 percent.

Japanese yen banknotes of various denominations are arranged for a photograph. Photographer: Kiyoshi Ota/Bloomberg

Consumer prices fell for the seventh time in eight months in December, backing Prime Minister Shinzo Abe’s case for aggressive monetary easing to defeat deflation. Expectations of expanded stimulus have driven down the currency 11 percent against the dollar and 15 percent against the euro since Nov. 14, when elections were announced. Samsung dropped after saying the strengthening won may reduce operating profit by at least 3 trillion won ($2.8 billion) this year.

“The market’s looking for any excuse to sell the yen at the moment,” said Thomas Averill, managing director in Sydney at Rochford Capital, a currency and interest-rate risk management company. “The weakness in the yen has got quite a long way to go. It’s very hard to find economic fundamentals that justify buying the currency.”

Inflation Target

Bank of Japan Governor Masaaki Shirakawa said the 2 percent inflation target his policy board adopted this week won’t be easy to achieve. The central bank, which also announced open- ended easing this week, will make “considerable efforts” to reach the target, Shirakawa said today. Deputy Economy Minister Yasutoshi Nishimura said yesterday the yen’s decline isn’t over and a level of 100 versus the dollar wouldn’t be a concern.

Japan’s Topix Index is poised to rise for an 11th week, its longest weekly winning streak since 1973, as the weaker yen boosted exporters. Toyota Motor Corp. advanced 2 percent after a steel supplier gave the world’s biggest carmaker a discount, according to a report by the Nikkei. Sony Corp. surged 8.1 percent after a report it may sell its lithium battery operations.

The cost of insuring corporate bonds in Japan from non- payment fell to a 17-month low, according to credit-default swap traders. The Markit iTraxx Japan index decreased five basis points to 134.5 basis points, according to Deutsche Bank AG prices. The measure is on course for its lowest close since August 2011, according to data provider CMA.

Samsung’s Outlook

Samsung is the biggest member in the benchmark MSCI Asia Pacific Index with a 2.4 percent weighting. The world’s largest maker of mobile phones, TVs and computer-memory chips is poised for the lowest close since Nov. 30. The 2013 forecast overshadowed a better-than-expected 76 percent jump in fourth- quarter profit to 7.04 trillion won. South Korea’s Kospi Index retreated 1.2 percent.

South Korea’s won fell 0.4 percent to 1,072.60 per dollar, set for its worst week in eight months, as overseas investors pulled more than $500 million from Korean stocks in the last four days as the government hinted at more measures to curb currency appreciation. Finance Minister Bahk Jae Wan said on Jan. 23 that gains in the won were too steep after the currency rose 8.3 percent in 2012 and reached a 17-month high of 1,054.49 per dollar on Jan. 15.

Malaysia’s ringgit slid 0.4 percent to 3.0530 per dollar, after earlier touching 3.0583, the weakest since Jan. 2. The currency is headed for its biggest weekly drop since June on concern the government will call for an early general election that could weaken its grip on power.

The S&P 500 closed little changed at a five-year high yesterday as an unexpected drop in U.S. jobless claims countered a slump in Apple Inc., the gauge’s biggest member. Some 74 percent of the 141 companies in the S&P 500 that have released results so far exceeded profit projections, according to data compiled by Bloomberg.

 

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