By Chua Kong Ho and Masaki Kondo Nov. 26 (Bloomberg) -- The dollar fell to a 14-year low against the yen, sending metals higher. Japanese exporter shares dropped and Chinese banking stocks declined to a two-week low. The yen strengthened 0.9 percent versus the dollar to 86.56 at 1:40 p.m. in Hong Kong. The MSCI Asia Pacific index was little changed with five stocks falling for every three that advanced. The Topix Index lost 0.3 percent, dragged down by automakers and the Shanghai Composite Index fell 2.4 percent, led by Industrial and Commercial Bank of China Ltd. Zinc in Shanghai rallied as much as 1.8 percent. The dollar fell to the lowest since July 1995 after the Federal Reserve said yesterday that its decline was “orderly,” a signal to traders that the U.S. won’t prop up the currency as the world’s largest economy recovers from the first global recession since World War II. The dollar’s decline threatens profits for Asia’s exporters after the MSCI Asia Pacific Index gained 32 percent this year to trade at 1.5 times book value, up from 1.03 in March, according to data compiled by Bloomberg. “I’m not going to risk uncertainty when I’m sitting on nice gains for my portfolio,” said Roger Groebli, Singapore- based head of financial market analysis at LGT Capital Management, which oversees about $75 billion in assets. “The weak dollar is hurting Japanese exporters and their competitiveness.” ‘Watching These Movements’ Japanese Finance Minister Hirohisa Fujii said the government needs to take action on abnormal currency movements, remarks that failed to prevent the yen’s advance. “I am watching these movements, right now it’s time to watch them closely,” he told reporters in Tokyo today. “We need to take appropriate action against abnormal movements.” Fujii said yesterday that the dollar’s weakness is spurring the yen’s gain. Today he said “a strong U.S. dollar is in their national interest. There is no change in our support for that.” While the U.S. currency fell against the yen, the Dollar Index, which tracks the greenback against the currencies of six trading partners, rose 0.06 percent to 74.312 after reaching a 15-month low yesterday. Standard & Poor’s 500 Index futures fell 0.4 percent and U.S. markets are closed for the Thanksgiving holiday. Fed officials said in minutes of their Nov. 3-4 meeting released on Nov. 24 that the dollar’s decline has been “orderly” and that they would watch for any signs that the depreciation is pushing up people’s expectations for inflation. Record-low interest rates might fuel “excessive” speculation in financial markets and possibly dislodge expectations for low inflation, according to the minutes. Policy makers agreed that the chances of such effects were “relatively low” and they will remain alert to the risks. Japan Stocks Japan’s Topix declined 0.4 percent to 829.93. Honda Motor Co., which generated 42 percent of its sales from North America in the third quarter, lost 1.3 percent to 2,760 yen. Pioneer Corp., which makes car-navigation and audio equipment, sank 0.8 percent to 239 yen. “The strong yen will curb a further rebound in corporate earnings and weigh on investor sentiment,” said Mitsushige Akino, who oversees the equivalent of $450 million in Tokyo at Ichiyoshi Investment Management Co. The Shanghai Composite fell after China Minsheng Banking Corp. became the first of the nation’s lenders in four years to fall in its Hong Kong trading debut. Minsheng dropped 1.2 percent to HK$8.97 after raising HK$30.1 billion ($3.9 billion) in the city’s biggest public share sale since April 2007. China Banks The decline added to concerns about Asia’s banks, which need more capital. China’s five largest banks submitted preliminary plans to regulators earlier this week, according to four people with knowledge of the matter. Industrial & Commercial Bank of China Ltd., the world’s third-largest company by market value, lost 2.5 percent. Stocks rose earlier after Indonesia’s central bank raised its 2009 growth forecast to as much as 4.5 percent and economists estimated Taiwan will say later today that gross domestic product contracted the least in a year during the third quarter. U.S. indexes rose yesterday as U.S. reports showed new home sales beat analyst forecasts and jobless claims fell, spurring optimism the world’s largest economy is recovering from the first global recession since World War II. Australia’s currency declined 1.1 percent 92.23 U.S. cents, nearly undoing yesterday’s 1.4 percent surge on prospects the Reserve Bank of Australia will raise rates for a record third month next week. The so-called Aussie lost 2 percent against the yen, poised for the sharpest loss since Oct. 30, after the nation’s statistics bureau said capital spending declined 3.9 percent from the previous quarter. The New Zealand dollar declined 1.2 percent to 72.39 U.S. cents. Taiwan Dollar Taiwan’s dollar rose 0.1 percent to NT$32.19. Gross domestic product shrank 2.6 percent in the three months through September, the least in a year, according to the median estimate of 17 economists in a Bloomberg News survey. The government will announce the figures at about 5 p.m. in Taipei. Vietnam’s dong plunged 3.4 percent to a record low of 18,500 against the dollar in Hanoi after the central bank devalued the currency to curb quickening inflation and a widening trade deficit. The VN Index sank 4.1 percent, the lowest since Aug. 7. Copper for delivery in three months on the Exchange gained as much as 1.1 percent to $7,060 a metric ton, the highest since September last year, after the dollar’s slump deepened and the U.S. housing market improved. Zinc futures in Shanghai rallied as much as 1.8 percent to 19,000 yuan a ton before trading at 18,420 yuan. “Metals climbed across the board because of the dollar’s slump,” Zhu Yanzhong, an analyst at Jinrui Futures Co. said in an e-mailed report today. Oil Support Crude oil fell 0.8 percent to $77.31 a barrel in New York after rising to a one-week high yesterday. “Oil had a bit of price support from a weaker U.S. dollar,” said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne. “House prices had some positive growth, so that was definitely a good indicator of consumption and the economy.” The economies of the Organization for Economic Cooperation and Development’s 30 member countries grew in the third quarter for the first time in more than a year led by a revival in output in Japan and the U.S., the OECD said in a statement this week. Asian bond risk rose today. The Markit iTraxx Asia benchmark index of 50 investment-grade borrowers outside Japan rose 3 basis points to 111.5 basis points as of 8:25 a.m. in Singapore, according to Royal Bank of Scotland Group Plc. Dubai’s Department of Finance said yesterday that Dubai World, with $59 billion of liabilities, is seeking to delay debt payments. Contracts protecting Dubai against default climbed 122 basis points to 440 basis points yesterday, the most since they began trading in January, according to credit-default swap prices from CMA Datavision. To contact the reporter on the story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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