Asian Stocks, U.S. Futures Tumble on Japan Quake; Gold Gains

The Nikkei 225 Stock Average tumbled the most in two years, leading declines in Asian stocks, while U.S. equity index futures and oil fell after Japan’s biggest earthquake on record. Gold rose and the yen weakened.

The Nikkei 225 plunged 4.3 percent and the MSCI Asia Pacific Index was 2.1 percent lower at 132.25 as of 10:20 a.m. in Tokyo. Standard & Poor’s 500 Index futures fell 0.4 percent. Crude retreated for a fifth day in New York, while gold rose 0.7 percent to $1,427.85 an ounce. The yen slipped against 13 of 16 major currencies. The cost of protecting Japan’s sovereign and corporate bonds from non-payment surged.

Prime Minister Naoto Kan said Japan is facing its worst crisis since the end of World War II, as local media said the death toll from the March 11 earthquake and the ensuing tsunami may top 10,000. The Bank of Japan today injected 7 trillion yen ($86 billion) into the financial system.

“I expect a weaker tone to pervade Asian markets,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “Uncertainty about the ultimate impact of Friday’s earthquake and tsunami are likely to see investors adopt a cautious stance.”

More than six stocks dropped for each that gained on MSCI’s Asia index. Tokio Marine Holdings Inc., Japan’s second-largest casualty insurer, was the biggest decliner on the Nikkei 225. Paladin Energy Ltd., a uranium producer based in Perth, dropped 13 percent.

Bond Risk

The temblor and subsequent tsunami may have killed 10,000 people in Miyagi prefecture north of Tokyo, national broadcaster NHK reported, citing local police. The official toll reached 1,597, with 1,481 more missing and 1,683 injured, the National Police Agency said.

Credit-default swaps linked to Japanese government debt climbed 7.5 basis points to 86 basis points, according to Citigroup Inc. That’s the biggest increase since November and the highest level in about eight weeks, CMA prices show. The Markit iTraxx Japan index surged 21.5 basis points to 119 basis points, the largest gain in almost 10 months, according to Deutsche Bank AG and CMA in New York.

The Japanese yen retreated from a four-month high against the dollar amid speculation policy makers will sell the currency to aid exporters. The government sold 2.12 trillion yen in September in its first intervention in the foreign-exchange market since 2004. The yen reached 80.22 against the dollar on Nov. 1, the strongest since April 1995, when it reached a postwar record of 79.75.

The yen touched 80.62, the strongest since Nov. 9, before falling to 82.17 per dollar from 81.84 in New York last week. It declined 0.6 percent to 114.45 per euro.

Oil for April delivery fell 1.2 percent to $99.98 a barrel on concern Japan’s quake will limit demand in the world’s third- largest economy and crude user. Gold for immediate delivery climbed for a second day.