ASIAN stocks fell, led by Toyota Motor Corp and Honda Motor Co, as the yen rose to its highest in seven weeks, raising concern about profit growth.
Toyota dropped to its lowest since June 2006. HSBC Holdings Plc retreated after Goldman Sachs & Co cut its price estimate and said the bank may need to boost provisions for bad loans. China Mobile Ltd declined for a second day after ending talks to sell Apple Inc's iPhone in China.
"Today's (Tuesday) market drop is due to the yen's appreciation and domestic demand weakening," said Kiyoshi Ishigane, who helps oversee US$61 billion in assets at Mitsubishi UFJ Asset Management Co in Tokyo. "I'm avoiding exporters because a stronger currency will work against these companies, and financials."
The MSCI Asia Pacific Index dropped 1.1 percent to 150.45 at 7:08pm in Tokyo. The Nikkei 225 Stock Average sank one percent to 13,972.63, its first time below 14,000 since November 10, 2005, Bloomberg News said.
All Asian benchmarks retreated except in Taiwan, where the Taiex index had its steepest two-day gain since May 19, 2004. Cathay Financial Holding Co led the surge on speculation financial firms will be allowed to expand in Chinese mainland.
Hyundai Heavy Industries Co and Guangzhou Shipyard International Co paced a retreat by shipbuilders on concern new orders for vessels will fall. Centro Properties Group, the Australian owner of shopping malls in the United States that's negotiating to refinance debt, tumbled after its chief executive resigned.
Toyota, Japan's largest auto maker, declined 1.8 percent to 5,530 yen (US$50.21). North America accounted for 37 percent of sales in 2006, the biggest market for the car maker. Honda Motor, which gets more than half of its sales from North America, dropped 4.4 percent to 3,260 yen.
The yen was at 107.43 against the US dollar at 5:19pm and rose to as high as 107.38 on Monday, the strongest since November 27. The yen has added 13 percent since June 22, when it dropped to the lowest since December 2002.
Sony Corp, which counts America as its largest market, fell 2.2 percent to 5,910 yen.
HSBC declined 2.1 percent to HK$120.80 (US$15.48), the lowest close since October 28, 2005.
"Our economists now expect the US to slip into recession, and US property prices to fall by 20 percent to 25 percent," Roy Ramos, an analyst at Goldman Sachs in Hong Kong, said. "This leads to unnerving prospects for HSBC."