Bloomberg News

Asian Stocks Pare Losses as BOJ Expands Asset Buys, Yen Slips

February 14, 2012

Feb. 14 (Bloomberg) -- Asian stocks narrowed losses as Japanese stocks rallied after the country’s central bank unexpectedly increased asset purchases and the yen weakened.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, advanced 0.8 percent. E Ink Holdings Inc., which makes screens for Amazon.com’s handheld reader, slumped 4.7 percent in Taiwan. Cosco Pacific Ltd., which operates container facilities at Greece’s Piraeus port, fell 1.9 percent in Hong Kong after Moody’s Investors Service cut credit ratings of six European countries, reigniting concern the region may not contain its debt crisis.

The MSCI Asia Pacific Index dropped 0.3 percent to 125.41 as of 1:32 p.m. in Tokyo, paring losses of as much as 0.8 percent. Japan’s Nikkei 225 Stock Average advanced 0.6 percent after the Bank of Japan expanded an asset-purchase program to 65 trillion yen ($834 billion) from 55 trillion yen.

“The BOJ finally moved while other central banks are promoting more monetary easing,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. “Investors like it.”

Still, eight of the 10 industry groups on the MSCI Asia Pacific Index slid after Moody’s cut ratings of Italy, Spain, Portugal and three other European countries. The move follows downgrades in the last two months by Standard & Poor’s and Fitch Ratings.

‘Knee-Jerk Impact’

“These sorts of things can have a negative knee-jerk impact,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “The reality is we’ve been talking about this for so long that it should hardly be a surprise to anybody.”

Futures on the Standard & Poor’s 500 Index dropped 0.1 percent. The index climbed 0.7 percent in New York yesterday amid speculation the approval of budget cuts by Greece’s parliament yesterday would be enough to secure another bailout. European finance chiefs are expected tomorrow to ratify a 130 billion-euro ($171 billion) aid package for the debt-stricken nation.

Australia’s S&P/ASX 200 lost 0.8 percent even after a report showed confidence among the nation’s business rose to an eight-month high in January. South Korea’s Kospi Index fell 0.1 percent.

Hong Kong’s Hang Seng Index was little changed. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, declined 0.6 percent. Stocks slipped after a former deputy governor of China’s central bank said authorities probably won’t significantly ease credit conditions this year if the economy worsens.

--With assistance from Satoshi Kawano in Tokyo. Editor: Jason Clenfield.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.


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