Asian Stocks Drop on Global Economic Concern Over U.S., Greece

Asian stocks dropped on concern Greece’s debt crisis may worsen and after President Barack Obama said failure to raise the U.S. debt ceiling by early August might disrupt the global financial system.

BHP Billiton Ltd. (BHP), the world’s largest mining company, fell 1.9 percent in Sydney after gold and metal prices dropped. Rio Tinto Group, the second-biggest by sales, sank 1.5 percent.Toyota Motor Corp. (7203), the world’s No. 1 carmaker, slid 1.5 percent in Tokyo, whileMitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest publicly traded bank, lost 0.3 percent.

“Investors are getting more sensitive about taking risks on concern about the future of Greek debt issues,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc. “They may continue putting money in safe bonds or cash, rather than stocks.”

The MSCI Asia Pacific Index declined 0.7 percent to 135.17 as of 9:35 a.m. in Tokyo. About five stocks fell for each that rose on the gauge, which recorded its second straight weekly decline last week amid concern China’s anti-inflation policies may crimp global growth.

Japan’s Nikkei 225 (NKY) Stock Average sank 0.6 percent, while South Korea’s Kospi Index lost 0.4 percent. Australia’s S&P/ASX 200 Index slid 1.4 percent. www.bloomberg.com

Coffee Rises to 14-Year High on Rainfall in Colombia; Cocoa Prices Slide

Coffee climbed to the highest price in New York in almost 14 years as rains may hurt crops inColombia, the world’s second-largest producer of arabica beans. Sugar advanced.

Colombia’s Agriculture Ministry said a lack of sunshine will hurt the nation’s coffee crops over the next few months. Coffee plantations are being damaged by landslides and rains, Hamburg-based broker Eugen Atte GmbH said on April 28. “What is scarier is that, according to weather experts, the worse rains are yet to come,” the broker said in a report.

Strong demand, record-low inventories and production disruptions in several major producer nations are supporting the market, Bjarne Schieldrop, chief commodity analyst at SEB AB,Sweden’s third-biggest bank by market value, wrote in a report today. “The situation originated with three consecutive disappointing Colombian crop years.”

Arabica coffee for July delivery rose 3.55 cents a pound, or 1.2 percent, to $3.0865 a pound by 8:31 a.m. on ICE Futures U.S. in New York. Earlier the price touched $3.089, the highest since May 1997. Robusta coffee for July delivery rose $58, or 2.3 percent, to $2,613 a metric ton in London.

Roadways across Colombia have been damaged by rainfall, according to a statement from the Agriculture Ministry. Floods, landslides and damaged bridges have isolated entire towns, according to Atte. The extent of the coffee losses is still unknown, German researcher F.O. Licht said in a report.

Production in the Andean nation will be 9.2 million bags in the current crop, the International Coffee Organization said on April 6. The figure is still below the 2007-08 level of 12.5 million bags, ICO figures show.

Guatemala Exports

Coffee exports from Guatemala, the largest producer in Central America, rose 8.7 percent to 447,265 bags in April, according to the country’s National Coffee Association, known as Anacafe. Exports for the marketing season started Oct. 1 came to 1.881 million bags, down 0.7 percent from 1.895 million bags in the previous season, data from the association showed.

Raw sugar for July delivery rose 0.40 cent, or 1.8 percent, to 22.27 cents a pound on ICE. White, or refined, sugar for August delivery fell $7.30, or 1.2 percent, to $607.80 a ton on NYSE Liffe, after reaching $597.50, the lowest since Oct. 4.

Egypt’s state-run Sugar and Integrated Industries Co. is seeking to buy 50,000 tons of raw sugar at a tender yesterday for May and June arrival, Hussein Ahmed, purchasing manager at the company, said by phone in Cairo.

Cocoa for July delivery dropped $65, or 2 percent, to $3,226 a ton in New York. Cocoa for July delivery fell 13 pounds, or 0.7 percent, to 1,968 pounds ($3,243) a ton in London. www.bloomber.com

New Zealand Dollar Falls as Bollard Holds Rates; Aussie Hits Record High

New Zealand’s dollar fell from near a three-year high as Reserve Bank Governor Alan Bollard left interest rates at a record low, citing an “uncertain” outlook after a February earthquake devastated Christchurch.

The so-called kiwi snapped a two-day gain as Bollard said monetary policy won’t change for some time and called the currency’s recent advance “unwelcome.” Australia’s dollar climbed to a record versus the greenback on speculation the nation’s Reserve Bank will raise interest rates to contain inflation earlier than its U.S. counterpart. Federal Reserve Chairman Ben S. Bernanke yesterday signaled he’ll maintain record monetary stimulus.

“Bollard’s tone in the statement seems to be a bit more dovish than the market expected, much more focused on damage from the quake than on positives from the trade boom,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Bollard’s lambasting of the high New Zealand dollar was a bit of a surprise after he said earlier this month that soaring commodity exports helped explain the currency’s strength.”

The New Zealand dollar dropped to 80.53 U.S. cents as of 11:01 a.m. in Sydney from 80.80 cents in New York yesterday, when it had climbed to 81.08 cents, the strongest since March 19, 2008. It slid 0.5 percent to 66.05 yen and weakened 0.7 percent to NZ$1.3553 per Australian dollar.

Outlook ‘Very Uncertain’

“The outlook for the New Zealand economy remains very uncertain,” Bollard said in statement today in Wellington after leaving the official cash rate at 2.5 percent. “Higher oil prices and the elevated level of the New Zealand dollar are both unwelcome. They will have some dampening effect on economic activity.”

The so-called Aussie advanced to $1.0917, the strongest level since exchange controls were scrapped in 1983, before trading at $1.0915, from $1.0872 yesterday. The currency rose 0.3 percent to 89.53 yen, the highest since April 11.

Bernanke said at his first press conference yesterday that the Fed is likely to continue reinvesting its securities holdings, including mortgage-backed debt, when they mature even after its $600 billion bond-buying program ends in June.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, fell to 73.091 today, the lowest level since July 2008.

Last to Raise

“What we’re looking at right now is the Fed most likely being the last major central bank to hike” interest rates, except the Bank of Japan, said Khoon Goh, Wellington-based head of market economics and strategy at ANZ National Bank Ltd. “That’s why we’re seeing ongoing U.S. dollar weakness because the currency market is very much trading on interest-rate differentials at the moment.”

Swaps traders are betting the Reserve Bank of Australia will raise its target rate by 26 basis points over the next 12 months, up from bets on an increase of 19 basis points last week, a Credit Suisse Group AG index shows.

Consumer prices in the country gained 1.6 percent last quarter from the previous three months, the biggest jump since 2006, the Bureau of Statistics said yesterday. www.bloomber.com