By Jake Lloyd-Smith and Akiko Ikeda

July 29 (Bloomberg) -- Most Asian stocks fell and the yen gained on concern the pace the global recovery may slow. The New Zealand dollar slumped as the central bank said deteriorating prospects for growth will taper the pace of future interest-rate increases after it raised its benchmark.

Losers outnumbered gainers 558 to 346 on the MSCI Asia Pacific Index, which was little changed at 119.49 at 2:10 p.m. in Tokyo after the U.S. Federal Reserve said growth eased in some areas of the world’s largest economy. Futures on the U.S. Standard & Poor’s 500 gained 0.2 percent. Copper and oil were little changed, overturning earlier losses.

U.S. economic growth slackened in some areas over the past two months, dragged down by commercial real estate and the expiration of a tax credit for homebuyers, the Fed said yesterday in its Beige Book business survey. U.S. economic growth slowed to an annual rate of 2.5 percent last quarter, from 2.7 percent the prior three months, according to a Bloomberg survey before a Commerce Department report tomorrow.

“The Beige Book confirmed business sentiment is worsening,” said Mitsushige Akino, who oversees the equivalent of $450 million in assets at Ichiyoshi Investment Management Co. “People are waiting for the Fed’s next step.”

The Nikkei 225 Stock Average fell 0.4 percent. Advantest Corp., a maker of memory-chip testers that gets almost 80 percent of its revenue overseas, slumped 4.6 percent as the yen climbed.

Panasonic Slumps

Panasonic Corp. tumbled 9.6 percent. There’s concern the electronics maker will need to raise capital to buy the shares of Sanyo Electric Co. and Panasonic Electric Works Co. it doesn’t own, three people familiar with the matter said. Sanyo surged 26 percent. NEC Corp. lost 3.7 percent as Japan’s largest maker of personal computers said its first-quarter loss widened.

Australia’s S&P/ASX 200 Index declined 0.1 percent as Woodside Petroleum Ltd., the country’s second-largest oil and gas producer, dropped 0.6 percent.

“As economies in the U.S. and Europe lose momentum, the negative impact may reach other regions,” said Soichiro Mori, a general manager at FXOnline Japan Co., a margin-trading company. “Growth-sensitive currencies may drop against the yen.”

The yen, which typically appreciates in times of financial turmoil, strengthened against 15 of 16 major counterparts. The Japanese currency rose to 113.35 per euro from 113.66 yesterday, and gained to 87.23 per dollar from 87.47.

Kiwi Weakens

New Zealand’s dollar weakened against all its major counterparts after central bank Governor Alan Bollard said that the “pace and extent” of future rate increases would be more moderate than projections he made in June. The official cash rate was boosted by a quarter percentage point to 3 percent.

Three-month copper futures in London gained as much as 0.1 percent to $7,180 a metric ton, retracing an earlier 0.6 percent decline. New York crude oil futures climbed 0.2 percent to $77.17, overturning a 0.3 percent decline.

The cost of protecting Asia-Pacific bonds from non-payment increased, according to traders of credit-default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan rose 2 basis points to 117 basis points, according to Credit Agricole CIB.

Chinese manufacturing data due next week could jolt global markets by showing the first contraction in 17 months, according to analysts at Societe Generale SA and Westpac Banking Corp.

Seasonal factors mean there is a “tangible risk” the government-backed Purchasing Managers’ Index for July will slip to less than 50 for the first time since February 2009, said Glenn Maguire, chief Asia economist at Societe Generale.

--With reporting by Yoshiaki Nohara in Tokyo, Ben Sharples in Sydney and Ron Harui in Singapore.

--Editors: Jake Lloyd-Smith, Patrick Chu

To contact the reporters for this story: Jake Lloyd-Smith in Singapore at jlloydsmith@bloomberg.net; Akiko Ikeda in Tokyo at iakiko@bloomberg.net.

To contact the editor responsible for this story: Patrick Chu in Tokyo at pachu@bloomberg.net.