Yen Weakens as Hatoyama Resigns; European Stocks, Gold Decline

une 2 (Bloomberg) -- The yen weakened after Japanese Prime Minister Yukio Hatoyama quit. Stocks declined in Europe, led by energy companies, while U.S. equity futures gained.

The yen fell against all but one of the 16 most-traded currencies tracked by Bloomberg at 8:48 a.m. in New York. The Stoxx Europe 600 Index lost 0.8 percent, with the 38-company oil and gas group dropping 1.9 percent as BP Plc fell 1.9 percent. The MSCI Asia Pacific Index slumped 1.1 percent and Standard & Poor’s 500 index futures expiring in June rose 0.3 percent. Copper fell and gold slid for the first time in eight days.

Japan’s Hatoyama said he’ll step down, less than two months before elections, raising concerns that the world’s second- largest economy will continue to sputter at the same time that China takes steps to cool growth and Europe struggles amid record deficits. The U.S. Justice Department yesterday said it’s investigating whether any criminal or civil laws were violated when a drilling rig leased by BP exploded in the Gulf of Mexico in April. The biggest oil spill in U.S. history may damage the prospects of other energy companies seeking to operate offshore.

Hatoyama’s resignation is “sending the yen lower across the board,” a team of strategists at Societe Generale SA led by London-based Vincent Chaigneau wrote in a report today. “The yen could remain under pressure in the very near term as political uncertainty remains elevated.”

The yen declined 1 percent versus the dollar and 0.7 percent against the euro. Europe’s single currency dropped 0.3 percent to $1.2195.

Stricter Regulations

The Nikkei 225 Stock Average dropped 1.1 percent as Sony Corp. sank 2.8 percent in Tokyo. Mitsui & Co., which owns a stake in a BP oil field in the Gulf of Mexico, slumped 8.3 percent amid concern about stricter regulations on companies operating in the region. Bank of China Ltd. tumbled 5.1 percent in Shanghai on speculation a convertible bond sale will dilute shareholders’ stakes.

BP slipped 1.9 percent in London, extending yesterday’s 13 percent slide that was the biggest since 1992. Petroleum Geo- Services ASA, which provides surveys of oil and gas fields, dropped 3.3 percent in Oslo. Prudential Plc slipped 2.5 percent as its attempt to cut the price of the $35.5 billion takeover of American International Group Inc.’s main Asian unit failed, leaving the biggest purchase in the U.K. insurer’s history on the verge of failure.

Home Sales

The gain in U.S. stock futures indicated the S&P 500 may pare some of yesterday’s 1.7 percent slump. A report from the National Association of Realtors due at 10 a.m. in Washington may show the number of contracts to purchase previously owned homes rose in April for a third consecutive month as buyers rushed to lock in a government tax credit. The index of pending- home purchases climbed 5 percent following a 5.3 percent gain a month earlier, according to the median forecast in a Bloomberg News survey of 40 economists.

Emerging-market stocks fell for a second day, the first back-to-back decline in two weeks. The MSCI Emerging Markets Index lost 0.4 percent, with commodity producers leading the retreat. Gold Fields Ltd. dropped 2.2 percent in Johannesburg.

Copper for delivery in three months declined 2.2 percent to $6,604 a metric ton on the London Metal Exchange. Aluminum, nickel and zinc also retreated. Gold for immediate delivery fell 0.6 percent to $1,218.25 an ounce in London. Crude oil for July delivery dropped 0.7 percent to $72.08 a barrel in New York.

To contact the reporter on this story: Stuart Wallace in London at