Asian stocks rose, with the Nikkei 225 Stock Average climbing to a 4 1/2-year high after the Bank of Japan (8301)’s unprecedented stimulus. Chinese and Taiwanese shares fell after more infections from a deadly new strain of bird flu.
Toyota Motor Corp., the world’s biggest carmaker, gained 4.1 percent as the yen weakened to its lowest level since June 2009 and all but seven of the companies on the Japanese gauge advanced. EVA Airways Corp., Taiwan’s second-largest carrier, slumped the most in 21 months in Taipei, dragging the nation’s equities benchmark to the biggest slump since June.
The MSCI Asia Pacific Index gained 0.5 percent to 134.15 as of 8:18 p.m. in Tokyo. The yen’s weakness muted the impact on the dollar-denominated regional benchmark index of a surge in Tokyo-listed companies. The measure has advanced the last five months as Japanese shares increased on speculation the nation will deploy more stimulus and amid signs the U.S. economy is recovering.
“With the currency weakening to the 98 yen per dollar range, it’s almost 10 yen weaker than manufacturer estimates, so exporters earnings may come in above expectations this earnings season,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “The speed at which the Japanese currency weakens is getting harder to control by the government. That’s something that may be a concern in the mid-term.”
Japan’s Nikkei 225 added 2.8 percent in local currency terms and rose 1.4 percent when priced in U.S. dollars, after unprecedented stimulus from the Bank of Japan’s new leadership sparked a surge in Japanese shares. Trading volume was about 36 percent higher than the 30-day average, according to data compiled by Bloomberg.
BOJ officials said April 4 the central bank will increase its monthly bond purchases to 7.5 trillion yen ($76 billion), exceeding the 5.2 trillion yen forecast by economists surveyed by Bloomberg. They also suspended a cap on some bond holdings and dropped a limit on debt maturities. They set a two-year horizon for their goal of 2 percent inflation. Officials are working to end 15 years of deflation.
Japanese exporters advanced. Toyota gained 4.1 percent to 5,300 yen, increasing for a fourth day. Honda Motor Co. (7267), which gets about 80 percent of its sales outside of Japan, rose 3.7 percent to 3,805 yen. The yen fell to 99.01 per dollar. A decline in the currency boosts the value of Japanese export earnings when repatriated.
What was “surprising was that the BOJ board voted almost unanimously for these significant moves in such a short time after the leadership change -- indicating strong leadership by Governor Haruhiko Kuroda,” said Michael Kurtz, Hong-Kong based head of global equity strategy at Nomura Holdings Inc., Japan’s largest brokerage. “These developments should all lend strong support to Japanese equities. Even though monetary policy may now remain unchanged for a while, the BOJ stands ready to take further action in the case of any loss of economic momentum, financial-market volatility or yen strengthening.”
Futures on the Standard & Poor’s 500 Index advanced 0.2 percent. The gauge dropped 0.4 percent April 5 after data showed the U.S. economy added less than half the number of jobs economists forecast in March.
Taiwan’s Taiex Index retreated 2.4 percent as the market reopened after a holiday on April 4 and April 5 as stocks reacted to the bird-flu outbreak. That’s the biggest drop in 10 months. EVA Airways slumped 6.8 percent to NT$16.45.
China tried to ease concerns that a new strain of bird influenza will spark an epidemic as authorities reported three more infections of the deadly H7N9 virus that’s killed six people since March. The outbreak of the virus caused soybean futures and shares of Chinese companies traded in Hong Kong to fall April 5 amid concern the disease will hurt demand in the world’s second-largest economy.
“There’s going to be near-term pressure no matter how you cut it,” said Marco Li, Hong Kong-based portfolio manager at Manulife Asset Management, which oversees $238 billion. “You have this overhang now, and until you get clarity, people will see that as a potential risk for further exacerbation.”
Hong Kong’s Hang Seng Index was little changed. China’s Shanghai Composite dropped 0.6 percent, paring a drop of as much as 2 percent as it reopened after a holiday. The Shanghai measure has slumped in the past two months amid concern steps to cool property prices will drag on economic growth.
Airlines listed in Hong Kong rebounded after slumping April 5. Cathay Pacific Airways Ltd., Asia’s largest international carrier, rose 4.1 percent to HK$12.78. China Southern Airlines Co. (1055) increased 3.4 percent to HK$4 and Air China Ltd., the nation’s biggest carrier by market value, jumped 4.5 percent to HK$6.32.
Australia’s S&P/ASX 200 Index rose 0.3 percent and South Korea’s Kospi index slid 0.4 percent. New Zealand’s NZX 50 Index retreated 0.8 percent and Singapore’s Straits Times Index lost 0.4 percent.
The MSCI Asia Pacific Index (MXAP)’s 3.2 percent advance his year through April 5 left the measure trading at 13.6 times estimated earnings, compared with a multiple of 14 for the S&P 500 and 12.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
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