Japanese shares led Asian stocks higher after a contender for Bank of Japan governor said extra monetary easing can be justified this year. South Korea’s Kospi Index reversed gains as North Korea conducted a nuclear test.
Canon Inc., Japan’s largest camera maker that gets 80 percent of sales abroad, gained 2.2 percent as the yen touched the lowest level since May 2010. Dentsu Inc. soared 10 percent as nine-month operating profit climbed 24 percent. Nissan Motor Co. sank 3.8 percent after Japan’s second-biggest carmaker reported third-quarter profit that fell short of analyst estimates, with sales dropping in China.
The MSCI Asia Pacific Index gained 0.1 percent to 132.57 at 8:28 p.m in Tokyo, snapping three days of losses as three shares advanced for every two that fell. Equity markets in Japan and South Korea reopened today after yesterday’s holiday, while markets in China, Hong Kong, Taiwan, Singapore, Vietnam and Malaysia remain shut.
“Candidates for the governor of the Bank of Japan have been making some very sympathetic remarks,” Stephen Wood, New- York based market strategist who helps manage about $163 billion at Russell Investments, said in a Bloomberg Television interview with Susan Li. “Right now you’ve got the initial stages of policy relief in Japan. Clearly what they’re looking at will be better for equity markets than we’ve seen for a while. It might be early days there.”
Japan’s Nikkei 225 Stock Average gained 1.9 percent, while Australia’s S&P/ASX 200 Index was little changed and New Zealand’s NZX 50 Index slid 0.1 percent. South Korea’s Kospi Index reversed gains, falling 0.3 percent, as the country’s national security adviser Chun Yung Woo said North Korea carried out a nuclear test at 11:57 a.m. local time today.
Japanese exporters and banks advanced. Canon climbed 2.2 percent to 3,305 yen and Toyota Motor Corp. gained 0.5 percent to 4,920 yen. Mizuho Financial Group Inc. added 4.8 percent to 217 yen and Sumitomo Mitsui Financial Group Inc., Japan’s second-largest bank by market value, rose 3.5 percent to 3,875 yen.
The BOJ could usher in a growth spurt unseen in a generation by stepping up stimulus and ending deflation, according to Haruhiko Kuroda, head of the Asian Development Bank. Kuroda, who said he was “satisfied” with his current job amid Prime Minister Shinzo Abe’s preparations for unveiling a nominee to succeed Masaaki Shirakawa, said that additional BOJ stimulus could be justified for 2013. Kuroda has been cited by JPMorgan Chase & Co. and Credit Suisse Group AG as the top candidate for BOJ governor.
The BOJ last month said it would start open-ended asset purchases only in January 2014, and the board is forecast to keep its policy unchanged at a Feb. 13-14 gathering, according to a Bloomberg News survey of analysts. The yen weakened to as much as 94.46 per dollar yesterday, its lowest level since May 2010.
Futures on the Standard & Poor’s 500 Index slipped less than 0.1 percent today. The S&P 500 dropped 0.1 percent yesterday after a six-week rally left the gauge trading at its most expensive valuation since July 2011.
The S&P 500 has rallied 6.4 percent in 2013 to its highest level since November 2007 as U.S. lawmakers reached a budget compromise and companies reported better-than-estimated earnings. That’s more than double the MSCI Asia Pacific Index’s gain of 2.4 percent this year through yesterday.
The MSCI Asia Pacific Index, the benchmark regional equities gauge, traded at 14.7 times average estimated earnings compared with 13.7 for the S&P 500 and a multiple of 12.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Of the 288 companies on the MSCI Asia Pacific index that have reported earnings so far this quarter and for which Bloomberg has estimates, 53 percent have exceeded profit expectations. Some 53 percent have missed sales projections. That compares with 74 percent of S&P 500 companies that topped profit forecasts during the period, while 33 percent fell short of sales estimates, data compiled by Bloomberg show.
Among companies having reported results, Dentsu gained 10 percent to 2,838 yen, the highest closing price since January 2008. Nissan slid 3.8 percent to 950 yen.
Whitehaven Coal Ltd., Australia’s second-biggest independent coal producer, rose 7.8 percent to A$3.19, the largest advance in two months, after gaining conditional approval to build a A$766 million ($789 million) mine.
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