Asian shares, oil higher but worries about growth linger

1 of 4. Men walk past logos at the Tokyo Stock Exchange in Tokyo February 6, 2013.

Credit: Reuters/Toru Hanai

By Chikako Mogi

TOKYO | Thu Apr 18, 2013 8:26pm EDT

TOKYO (Reuters) – Worries over global growth capped Asian share prices on Friday as more soft U.S. economic data and mixed U.S. earnings results further undermined investor sentiment already hit by a broad sell-off that started earlier in the week.

The MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was steady early on Friday after falling 0.6 percent the previous session.

Australian shares .AXJO inched up 0.2 percent and South Korean shares .KS11 opened little changed.

Japan’s Nikkei average .N225 opened 0.4 percent higher. .T

The Standard & Poor’s 500 Index .SPX broke under its 50-day moving average for the first time this year, signaling a possible reversal in the market’s uptrend to a record peak earlier this month. The S&P 500 is set to post its worst week since June 2012, although it remains up 8.1 percent for 2013.

Oil and gold recovered overnight but remained vulnerable.

“Weak growth signals globally are challenging the recent liquidity-driven moves in currency markets. Moreover, our commodity price predictor suggests continued testing times over the next couple of months,” Morgan Stanley said in a research note.

The note added, however, that the liquidity being pumped into markets by global central banks will continue to lend support.

“We expect the current pause in currency market trends to be temporary, providing renewed opportunities to establish bullish positions in many of the pro-cyclical currencies,” it said.

Data on Thursday showed the number of Americans filing new claims for unemployment benefits rose last week and factory activity in the nation’s Mid-Atlantic region cooled in April.

In the euro zone, political risks remained with Italy’s parliament failing to elect a new state president in its first vote on Thursday, raising concerns that the lack of a government would delay fiscal reforms and undermine the economy.

Traders will watch a meeting of the Group of 20 countries that began on Thursday in Washington for any critical remarks over the yen’s continued weak trend.

The yen was down 0.1 percent against the dollar at 98.24 yen, as market players believed that the weak yen trend would be accepted to be a result of Japan’s aggressive monetary easing aimed at beating stubborn deflation, and not simply competitive devaluation.

The euro held steady around $ 1.3054.

Spot gold was up 0.1 percent to $ 1,391.80, rebounding sharply after falling nearly 3 percent in Asian trade on Thursday to a low of $ 1,339.86 an ounce on news that holdings of the world’s largest exchange-traded fund, the SPDR Gold Trust, had dropped 1 percent to their lowest level in three years. <GOL/ETF>

Bullion touched its lowest in more than two years of $ 1,321.35 on Tuesday.

Brent crude oil rose more than $ 1 a barrel back toward $ 100 a barrel on Thursday, snapping a six-day losing streak as low prices brought in bargain hunters. <O/R>

U.S. crude futures were up 0.5 percent at $ 88.18 a barrel early on Friday after touching a 2013 low of $ 85.61 on Thursday.

(Editing by Eric Meijer)

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Reuters: Business News

Asian shares, oil higher but worries about growth linger

GLOBAL MARKETS-Shares rebound, oil flat as growth worries linger

Thu Apr 18, 2013 3:47am EDT

* European shares open up 0.2 percent after sharp falls

* Oil steady just under $ 98 a barrel on demand concerns

* Gold tumbles towards 2-year low, physical demand seen

By Richard Hubbard

LONDON, April 18 (Reuters) – European shares rebounded and oil steadied on Thursday as this week’s brutal selloff, provoked by concerns about global economic growth, lured back some investors looking for bargains.

Europe’s broad FTSE Eurofirst 300 index, which hit its lowest level of the year on Wednesday, opened up 0.2 percent while London’s FTSE 100, Paris’s CAC-40 and Frankfurt’s DAX were as much as 0.3 percent higher.

Jonathan Sudaria, a dealer at Capital Spreads, cited tentative bargain hunting. “But as yesterday’s sudden sell-off showed, it doesn’t take much to bring out the bears in this current environment,” he said in a note.

Surprisingly weak economic data from China and the United States recently and the International Monetary Fund’s decision to trim its global growth forecast have undermined confidence in the outlook for the world economy this year.

However, some analysts say the market move is more a timely correction after strong gains in the first quarter of the year, when optimism over the U.S. economy lifted Wall Street stocks to record peaks and boosted European shares to multi-year highs.

U.S. stock futures were little changed, suggesting a calm Wall Street open after both the Standard & Poor’s 500 Index and the Nasdaq Composite Index closed down more than 1 percent on Wednesday.

Japan’s Nikkei average declined 0.9 percent and MSCI’s index of Asia-Pacific shares outside Japan fell 0.7 percent, leaving the MSCI world equity index down 0.2 percent.

COMMODITIES SINK

The prospect of lower growth, especially in China, has continued to weigh on the commodity markets where copper and oil are near multi-month lows and gold is close to its weakest level for two years.

U.S. gold futures, which sometimes dictate spot gold prices, were at $ 1,377.40 an ounce, down about 0.4 percent, as holdings in the world’s top gold-backed exchange-traded fund hit a three-year low.

Spot gold hit $ 1,339.86 an ounce, near Tuesday’s two-year trough of $ 1,321.35 and is down about a quarter from last year’s peak after shedding 18 percent so far this year.

However, the lower gold price was also expected to encourage demand from investors who want to hold the physical product rather than securities representing the metal.

“Investors, who value physical gold over paper gold, have viewed these low prices as a buying opportunity,” said Edmund Moy, chief strategist at gold provider Morgan Gold, adding that sales of new gold coins from the U.S. Mint had jumped in April.

Copper, seen as a gauge for manufacturing and China-related growth, broke below $ 7,000 a tonne for the first time since late 2011, with London copper futures sliding as much as 4 percent to $ 6,800 a tonne.

Brent crude oil steadied after touching its lowest levels since last July, but remains well below the $ 100 per barrel mark while U.S. crude fell 0.2 percent to $ 86.55, after dipping under $ 86 earlier to a fresh four-month low.

“We’re just seeing an ongoing adjustment to the weaker data seen earlier in the week … What we’re (also) seeing is a price adjustment to an emerging outlook that supply is increasing,” said Ric Spooner, chief market analyst at CMC Markets.

In the debt market German Bund futures were steady, supported by expectations of loose central bank monetary policy, with the focus on Spanish and French debt auctions later in the day.

The Bund future was flat at 146.20, close to a high of 146.54 set at the start of the month. Demand was boosted on Wednesday by comments from European Central Bank policymaker Jens Weidmann, who stoked belief that interest rates could fall if economic data remains weak.

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Reuters: Financial Services and Real Estate

GLOBAL MARKETS-Shares rebound, oil flat as growth worries linger

Two years after Fukushima disaster, doubts of food safety linger in Japan

In Japan, people call it 3-11. It’s shorthand for the tsunami and nuclear accident two years ago. The disaster left behind devastation that may never be completely cleaned up. Tens of thousands of people still can’t go home. People are still missing. And people are still afraid of radioactive contamination. Japan’s government insists the food supply is safe. But some people have made big changes in their eating habits.

David Wagner has lived in Japan for almost 30 years. He loves Japanese food. But these days, he gets groceries at a store that sells imported foods. In the store, he says, “So I buy my granola here … and the reason I’ll take this is, it’s from Germany.”

Wagner doesn’t want to leave Japan. He’s got good work here as a business communication consultant. But after the nuclear accident, he started a Facebook page on food safety. He stopped eating mushrooms, because they absorb radiation. If he wants fish — here in the land of sushi — he mail-orders it, canned.

“I just do not eat the fish in Japan anymore,” he says. “They can’t test all the fish.”

Fish is still popular in Japanese restaurants and groceries, but uncertainty about food is widespread among the Japanese. Some people even use private testing services.

Customers come to this Tokyo shop for organic cotton towels and hand-dipped candles — and also to use the radiation detectors. There are two of them in back.

Hidetake Ishimaru set up shop here after the disaster, checking food for radiation at 3,000 yen a test — about $ 32. Samples fill a shelf: “Brown rice and soybeans, white rice … that is seaweed, I think,” he says.

The Japanese government says the country’s rice is safe to eat. But customer Yuki Yanagase is skeptical. Ishimaru translates for her: “I don’t believe it. So I’m gathering many informations from Internet.”

The Internet’s full of scientific studies and conspiracy theories about radiation — what you might expect when a danger is invisible and hard to understand. If your job is to try to explain things to the public, good luck.

Dr. Shuichiro Hayashi works on crisis management for the food safety division of the Japanese Ministry of Health, Labor and Welfare. Hayashi says after 3-11, Japan set such strict limits for radiation that you could eat food contaminated at that level every day and be just fine. Japan allows much less radiation in food than the U.S. or Europe.

His colleague in the Ministry of Agriculture, Mitsuhiro Doishita, says the government tested 10 million bags of rice from Fukushima in 2012, and only 71 were over the limit.

Many people told me they’re reassured by these measures. Wakako Yamane is an interpreter at an ad agency, stopping by McDonalds for coffee before work. She was worried about food right after the accident …

“Today I’m not concerned at all,” she says. “Some people are. I’m not. I just want to continue the way we’ve been living and I think we’re all right.”

This may be a case of what David Wagner calls radiation fatigue. He says you get tired of being vigilant about food. When we had lunch one day, he had a salad — something he wouldn’t have done a year ago. But he wasn’t sure he should.

“From everything I read, nobody can say definitively or non-definitively that it’s safe or not safe, and that’s what’s confusing for people like me,” he says.

Research about radiation is confusing. A new World Health Organization report on the Fukushima disaster says people are not at risk of health effects unless they were in the most contaminated areas. But the report acknowledges the limits of the research it relies on: Studies tend to look at people with higher levels of exposure — such as atomic bomb survivors. The long-term effects of low-level exposure are not as well known.

So some people figure — why take a chance? On yourself maybe, but what if you have kids?

Two-year-old Karera Tani demonstrates the English he’s learning in kindergarten. The Tani family lives in Chiba, near Tokyo. When the nuclear plant 130 miles away started spewing radiation, they fled to Osaka. They’re back now, but they buy drinking water from Hawaii. They use a grocery delivery service that tests food for radiation. Karera’s mom, Momo Tani, is a doctor. She says the high grocery bill is worth it, for her son’s health.

“Well, with things that aren’t supposed to be there like cesium, even if it’s under the limit it’s there, and you never know what the effect will be if it accumulates.”

Tani worries about the research that shows that children are particularly vulnerable to exposure to radiation. A lot of parents told me they aren’t concerned about their own diets, but they’re careful about what their kids eat. Many of them told me they feel bad for not supporting the farmers in the disaster region, but they’re buying their rice from Kyushu, far away from the Fukushima Daiichi nuclear plant.

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Two years after Fukushima disaster, doubts of food safety linger in Japan

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