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Asian Stocks Rise as Japanese Equities Rally on BOJ

By Adam Haigh
April 03, 2013 6:11 AM EDT 10 Comments
Employees work on the trading floor of the Tokyo Stock Exchange in Tokyo.
Photographer: Tomohiro Ohsumi/Bloomberg
Employees work on the trading floor of the Tokyo Stock Exchange in Tokyo.

Asian stocks rose, with the regional benchmark climbing for the first time in three days, as Japan’s central bank began a two-day policy meeting and better-than- estimated U.S. factory orders buoyed exporters.

Honda Motor Co. (7267), which gets 44 percent of its revenue in North America, gained 4.6 percent in Tokyo as rising demand for motor vehicles boosted U.S. factory orders. Fast Retailing Co. climbed to the highest on record as warmer weather in Japan and an extra Sunday in March fueled the biggest monthly sales jump in more than three years at Asia’s largest apparel retailer. Commonwealth Bank of Australia fell 0.7 percent as a report showed new home sales in the country retreated.

The MSCI Asia Pacific Index rose 0.5 percent to 134.52 as of 7:05 p.m in Hong Kong, having swung between gains and losses at least four times. The gauge climbed the past five months as Japanese shares increased on speculation the nation will deploy more stimulus and amid signs the U.S. economy is recovering.

“You still have ongoing support from the Federal Reserve and the Bank of Japan (8301),” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has $126 billion under management. “It’s probably more of a buying opportunity for equities and I’d caution about getting too bearish.”

Japan’s Nikkei 225 Stock Average advanced 3 percent, the most in two months, as the first policy meeting began under the leadership of Haruhiko Kuroda as governor. Kuroda, who reiterated yesterday that bold action is necessary to meet expectations, has indicated that expanded purchases of government bonds will be the main tool for monetary easing.

Regional Gauges

Australia’s S&P/ASX 200 Index (AS51) slid 0.6 percent and South Korea’s Kospi Index dropped 0.2 percent. New Zealand’s NZX 50 Index was little changed. Singapore’s Straits Times Index added 0.1 percent, while the Shanghai Composite lost 0.1 percent and Hong Kong’s Hang Seng Index slid 0.1 percent.

Japanese exporters rose as orders placed with U.S. factories rose the most in five months in February, boosted by a pickup in demand for motor vehicles and commercial aircraft, a Commerce Department report showed yesterday. Honda climbed 4.6 percent to 3,525 yen. Toyota Motor Corp. advanced 3.8 percent to 4,790.

The MSCI Asia Pacific Index (MXAP), the benchmark regional equities gauge, yesterday traded at 13.3 times average estimated earnings compared with 14.2 for the Standard & Poor’s 500 Index and 12.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

U.S. Futures

Futures on the S&P 500 added 0.2 percent. The measure climbed 0.5 percent yesterday after the Commerce Department report showed a 3 percent gain in factory orders.

Fast Retailing Co. surged 14 percent to 35,650 yen as sales at its Uniqlo Japan outlets soared 23 percent. Uniqlo has opened outlets in higher-end shopping areas such as Tokyo’s Ginza district to revive sales at the brand, which started as a budget label about 30 years ago.

Private home sales in Australia declined 5.3 percent in February from January, the Housing Industry Association said. Data last month showed mortgage demand is growing at close to the slowest pace since records began in 1977. Commonwealth Bank (CBA) slid 0.7 percent to A$68.45. Australia & New Zealand Banking Group lost 1.9 percent to A$28.27.

The London Metal Exchange Index retreated 1.3 percent yesterday, the most in two weeks. BHP Billiton Ltd., the world’s biggest miner, lost 1.5 percent to A$32.23 and Rio Tinto Group sank 2 percent to A$55.38.

Tokyo Electric Power Co. (9501) soared 24 percent to 313 yen after Kyodo news reported the utility may save 175 billion yen a year by switching to coal-fired power plants.

Chow Tai Fook Jewellery Group Ltd., a Hong Kong-based chain with more revenue than Tiffany & Co., rose 1.1 percent to HK$10.60 after retail sales in the city increased more than economists estimated.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

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

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