Most Asian Stocks Climb as Japanese Shares Advance

Most Asian stocks rose, with the regional benchmark index heading for the highest close since August 2011. Japanese shares gained after Bank of Japan Governor Masaaki Shirakawa said the central bank will pursue powerful monetary easing.

Olympus Corp. (7733), a maker of cameras and endoscopes, jumped 7.7 percent in Tokyo after Goldman Sachs Group Inc. raised the stock’s rating to buy. Billabong International Ltd. surged 16 percent as Australia’s largest surfwear maker received a takeover offer from VF Corp. and Altamont Capital Partners. LG Display Co. slid 3.5 percent in Seoul, pacing declines among Apple Inc. (AAPL) suppliers, after the Nikkei newswire reported Apple scaled back production plans for the iPhone 5.

The MSCI Asia Pacific Index rose 0.3 percent to 132.59 as of 7:30 p.m. in Tokyo, with seven shares rising for every six that fell. The gauge is extending a rally for a third consecutive month after reports showed China’s economy is recovering and Japanese shares gained on speculation new Prime Minister Shinzo Abe will pursue more aggressive policies to stimulate the world’s third-largest economy.

“Broadly speaking, share prices in Asia will be higher in the next 12 months,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “We’ve seen too much enthusiasm over the past two months or so in light of a fairly muted recovery. The debt-ceiling negotiations in the U.S. is a substantial issue in the near term that the market has got to confront and that’s going to hold things back.”

Failure by U.S. Congress to raise the nation’s debt ceiling could “impose severe economic hardship” on the country, Treasury Secretary Timothy F. Geithner said. Extraordinary measures being taken to avoid breaching the limit would work only until mid-February to early March, he said.

Election Boost

The Nikkei 225 Stock Average (NKY) gained 0.7 percent to its highest close since April 2010. The broader Topix Index rose 0.8 percent, extending a nine-week advance, the longest winning stretch since December 1989, after the yen fell to its weakest in more than two years yesterday.

“We believe Japanese equities still enjoy further upside given low valuations and prevalent underweight positions among global funds,” said Michael Kurtz, Hong-Kong based head of global equity strategy at Nomura Holdings Inc., Japan’s largest brokerage. Decisions on a new Bank of Japan governor and a proposed consumption tax increase “are likely to sustain further easing expectations, yen weakening, and other stimulus measures, to the support of Japanese equity prices.”

Nomura, Goldman Sachs Group Inc. and Bank of America Corp. are predicting Japanese stocks will extend their longest streak of gains in 23 years as extra economic stimulus boosts earnings.

Japanese Exporters

The yen rebounded to 88.87 per dollar today after yesterday touching 89.67 yesterday, the weakest level since June 23, 2010.

Japanese Economy Minister Akira Amari said the nation faces risks from any excessive decline in the yen, highlighting limits on Prime Minister Abe’s campaign to drive down the currency. A weaker yen boosts overseas income for exporters when repatriated.

BOJ Governor Shirakawa, whose term ends in April, said the central bank will provide powerful monetary easing and monitor the impact of currencies on prices and the Japanese economy. He spoke at a BOJ branch managers meeting in Tokyo today.

Japanese exporters advanced. Nissan Motor Co., which gets about 79 percent of sales from overseas, climbed 1.2 percent to 883 yen. Sony Corp., the maker of Bravia televisions and PlayStation game consoles, added 1.2 percent to 995 yen. Panasonic Corp., Japan’s largest consumer-electronics maker, rose 2.7 percent to 566 yen.

Rating Raised

Olympus jumped 7.7 percent to 1,937 yen. Goldman Sachs raised its rating to buy from neutral, saying demand for cameras with interchangeable lens is growing.

China’s Shanghai Composite Index (SHCOMP) advanced 0.6 percent. Hong Kong’s Hang Seng Index and Australia’s S&P/ASX 200 Index both lost 0.1 percent. South Korea’s Kospi Index declined 1.2 percent.

China Taiping Insurance Holdings Co. gained 6.2 percent to HK$16.54 in Hong Kong after saying it may buy a 25 percent stake in Taiping Life Insurance Co. from parent China Taiping Insurance Group Co.

Billabong surged 16 percent to 98 Australian cents in Sydney. VF Corp. and Altamont Capital made a takeover offer for the surfwear maker that matches a A$527 million ($556 million) bid from Paul Naude, director of the company’s Americas division.

Tata Consultancy Services Ltd., India’s largest software exporter, advanced 1.5 percent to 1,354.8 rupees in Mumbai after posting profit that beat analyst estimates.

U.S. Futures

The MSCI Asia Pacific Index (MXAP) fell for the first time in eight weeks last week as a report showed China’s inflation accelerated. The gauge traded at 14.2 times estimated earnings, compared with 13.3 times for the Standard & Poor’s 500 Index and a multiple of 12 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg News.

Futures on the S&P 500 Index lost 0.1 percent today. The gauge yesterday declined 0.1 percent from near a five-year high as Apple’s slump amid concern about iPhone sales offset a rally in Dell Inc.

Apple suppliers declined after the Nikkei newswire reported that it scaled back orders for iPhone parts by about half this quarter after sales missed targets.

LG Display slid 3.5 percent to 27,900 won in Seoul. Sharp Corp., Japan’s biggest maker of liquid crystal displays, dropped 2.7 percent to 321 yen in Tokyo. Hon Hai Precision Industry Co., which assembles Apple’s iPads and iPhones, sank 3.4 percent to NT$84.20 in Taipei.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; 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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