Asian Stocks Rise as Japan Consumer Prices Fall

Asian stocks rose, with Japanese shares posting their biggest annual advance since 2005, after a report that the country’s consumer prices fell fanned speculation the central bank will respond to government calls for more asset purchases.

Canon Inc. (7751), the world’s biggest camera maker, increased 2.1 percent, leading gains among Japanese exporters. Toshiba (6502) Corp. climbed 5 percent after the manufacturer said it’s in talks to sell a stake in its Westinghouse Electric atomic-power unit. BHP Billiton Ltd., Australia’s largest oil producer, advanced 1.1 percent after crude and metal prices rose.

The MSCI Asia Pacific Index (MXAP) climbed 0.6 percent to 129.59 as of 6:31 p.m. in Tokyo, heading for the highest close since August 2011. Two shares climbed for each that fell. The measure’s increase was limited by a further decline in the yen, which reduced the value of the Japanese companies that account for one-in-three of the Asia-Pacific gauge’s constituents.

“Central banks are going to keep interest rates low and provide more stimulus that will keep equity markets propped up as it has done this year,” said Kumar Palghat, managing director and founder of Kapstream Capital, which oversees at least $5.2 billion. “There will be some resolution to the fiscal cliff talks.”

The Asia-Pacific measure advanced 14 percent this year, the biggest rise since 2010, as the U.S. and Chinese economies showed signs of recovery and central banks around the world took action to shore up growth.

Today was the final trading day of the year for Japanese equity markets. The Nikkei 225 (NKY) Stock Average gained 23 percent this year, its biggest yearly gain since 2005. The measure, which rose 0.7 percent today, closed yesterday at its highest level since the day before 2011’s record earthquake triggered the worst nuclear crisis in 25 years.

Subaru Surge

Exporters climbed. Canon gained 2.1 percent to 3,340 yen. Li & Fung Ltd. (494), the maker of clothes and toys that gets more than 80 percent of sales abroad, rose 0.5 percent to HK$13.52.

Fuji Heavy Industries Ltd., which makes Subaru branded vehicles, climbed 1.7 percent to 1,076 yen, the highest close since July 1989, according to data compiled by Bloomberg. The company rose 131 percent this year and is the best-performing Japanese stock in the MSCI Asia Pacific Index.

Core consumer prices in Japan fell 0.1 percent in November from a year earlier, bolstering the case for Prime Minister Shinzo Abe to push for further monetary easing.

Futures on the S&P 500 gained 0.1 percent. Democrat and Republican congressional leaders in the U.S. plan to meet with President Barack Obama today as lawmakers seek to resolve an impasse before at least $600 billion in spending cuts and tax gains begin in January. House Republican leaders also announced the chamber will meet on Dec. 30.

Last Day

Today is the final trading day of the year in South Korea, Taiwan, Indonesia, Thailand, Vietnam and the Philippines. Thailand’s SET Index has surged 36 percent this year, the biggest advance by any Asian benchmark gauge after Pakistan’s Karachi 100 Index.

Hong Kong’s Hang Seng Index gained 0.2 percent today, extending this year’s advance to 23 percent. The city’s exchange will be open for a half day of trading Jan. 31.

China’s Shanghai Composite rose 1.2 percent today and has climbed 1.5 percent in 2012. South Korea’s Kospi gained 0.5 percent, extending this year’s increase to 9.4 percent. Australia’s S&P/ASX 200 Index added 0.5 percent today and surged 15 percent this year.

Toshiba climbed 5 percent to 337 yen after a spokesman for the Tokyo-based company said it’s in discussions with three parties on a possible sale of as much as 16 percent in the Westinghouse nuclear construction business.

Tepco Lawsuit

Tokyo Electric Power Co. slumped 6.4 percent to 206 yen as the owner of the power plant which had the world’s biggest nuclear disaster since 1986 was sued by eight U.S. sailors claiming they were exposed to radiation and the utility lied about the dangers. “We can’t comment as we have not received the complaint document yet,” Yusuke Kunikage, a Tepco spokesman, said by phone yesterday.

PT Bumi Resources slumped 73 percent in 2012 in Jakarta, the biggest slide among companies on Asia’s benchmark stocks index. Bumi is at the center of a dispute between its founders Nathaniel Rothschild and Indonesia’s Bakrie Group amid ongoing investigations in London and Indonesia into possible financial anomalies.

Sharp Corp. (6753) tumbled 55 percent this year as the TV maker warned last month about its ability to survive amid competition from overseas rivals. Japan’s largest liquid-crystal-display maker is selling as much as 9.9 billion yen ($121 million) selling shares to Qualcomm Inc. in a bid to restore its balance sheet.

United Spirits Ltd. posted the largest gains among Asian stocks this year, soaring 284 percent, as Diageo Plc said it will buy a controlling stake in India’s largest distiller for $2.04 billion.

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.