Asian Stocks Drop as Sharp, Advantest Reduce Profit Forecasts, Yen Gains

Asian stocks dropped, dragging the MSCI Asia Pacific Index to its second straight weekly decline, as Sharp Corp. and Advantest Corp. cut their profit forecasts.

Sharp Corp., Japan’s largest maker of liquid-crystal displays, tumbled 3.2 percent in Tokyo as a stronger yen hurt the outlook for export earnings. Advantest Corp., the world’s No. 1 maker of memory-chip testers, lost 5.5 percent as Nomura Holdings Inc. cut its rating.

“Exporters overall will likely slide” in Japan, said Juichi Wako, a senior strategist at Tokyo-based Nomura. “There are uncertainties about the outlook for earnings in the second half.”

The MSCI Asia Pacific Index fell 0.4 percent to 129.01 as of 9:49 a.m. in Tokyo, extending this week’s decline to 0.7 percent. The gauge dropped for the first week in two months last week after China, the world’s fastest-growing major economy, unexpectedly raised interest rates and said it grew at the slowest pace in a year.

Japan’s Nikkei 225 Stock Average decreased 1.4 percent, while South Korea’s Kospi Index dropped 0.9 percent. Australia’s S&P/ASX 200 Index fell 0.4 percent. New Zealand’s NZX 50 Index climbed 0.5 percent.

Futures on the Standard & Poor’s 500 Index slipped 0.4 percent. While the index rose 0.1 percent yesterday in New York, most stocks fell as 3M Co. drove industrial shares lower after cutting its profit forecast.

Japanese exporters fell as the yen rose as high as 80.87 against the dollar, compared with 81.63 at the close of stock trading in Tokyo yesterday and a 15-year high of 80.41 reached on Oct. 25. A stronger yen reduces overseas income at Japanese companies when converted into their home currency.

Today is the peak day for earnings reports in Japan, with about 270 of the 1,664 companies in the Topix scheduled to report results, according to data compiled by Bloomberg.

About three companies have exceeded profit estimates for every two that fell short, based on data compiled by Bloomberg from the 322 companies in the Topix that have reported quarterly results since Oct. 7.