Asian Stocks Fall for 2nd Day, Yen Strengthens on U.S. Output

July 16 (Bloomberg) -- Asian stocks fell for a second day, led by Japanese exporters, after the yen strengthened and U.S. manufacturing weakened and Google posted disappointing earnings.

The MSCI Asia Pacific Index lost 0.5 percent to 116.31 at 11:40 a.m. in Tokyo and Japan’s Nikkei 225 Stock Average tumbled 1.6 percent, the most in two weeks. The yen appreciated to as strong as 87.17 per dollar in Tokyo from 87.40 in New York yesterday, near the 2010 high of 86.97 reached on July 1. Standard & Poor’s 500 Index futures rose less than 0.1 percent.

Asian markets retreated after Federal Reserve reports on the Philadelphia and New York regions showed manufacturing growth slowed this month and as Google Inc. reported lower-than- estimated profit. Losses were limited as Goldman Sachs Group Inc. agreed to a $550 million settlement with the Securities and Exchange Commission, the Senate passed a financial-industry regulation overhaul measure and BP Plc said it stopped the flow of oil at its leaking well in the Gulf of Mexico.

“Investors are reacting to the negative data that point to some slowdown in economic activity,” said Chu Moon Sung, a fund manager at Shinhan BNP Paribas Asset Management Co. in Seoul, which manages $26 billion.

Almost three stocks retreated for each that gained among the MSCI index’s 985 companies. Nintendo Co. dropped 3.4 percent to five-week low after its U.S. sales fell by a third in June. Sony Corp. and Nissan Motor Co. also declined more than 2 percent as the yen headed for a 1.6 percent gain this week.

Goldman Settlement

Stocks fell in the U.S. yesterday before staging a rebound in the final hour of trading before the settlement between Goldman Sachs and the SEC was disclosed. In addition to the penalty, the largest ever levied by the regulator against a Wall Street firm, Goldman Sachs acknowledged it made a “mistake,” the agency said. The S&P 500 rose 0.1 percent.

Goldman Sachs surged 4.4 percent. That helped overshadow the 4 percent decline in Google after it reported profit excluding some items of $6.45 a share in the second quarter. Analysts had estimated $6.52 a share, according to a Bloomberg survey.

Agricultural Bank of China Ltd. shares climbed 2.8 percent to HK$3.29 on its first day of trading in Hong Kong. The stock fell 0.4 percent in Shanghai, paring yesterday’s gains that marked the smallest first-day advance among the nine lenders that have sold shares in the city. CapitaMalls Malaysia Trust, the nation’s second-biggest real estate investment trust that also debuted for the first time today, fell 2 percent.

Consumer Prices

New Zealand’s dollar strengthened 1.1 percent to 72.16 U.S. cents from 72.75 cents after Statistics New Zealand said consumer prices rose 0.3 percent in the first quarter. That’s smaller than the median estimate of a 0.4 percent gain in a Bloomberg survey of 15 economists, which may give central bank Governor Alan Bollard room to raise interest rates at a gradual pace.

The U.S. is scheduled to release its consumer price index today, which may show a 0.1 percent decrease compared with May, according to the median estimate of economists surveyed by Bloomberg. A separate report may also show U.S. household sentiment deteriorated this month.

“The market is becoming increasingly worried about downside risks to the U.S. economy,” said Toshiya Yamauchi, a senior foreign-exchange analyst in Tokyo at Ueda Harlow Ltd.