Asian Stocks Advance on G-20, Yen; Li & Fung Declines

Asian stocks rose, with the regional benchmark index near an 18-month high, as Japanese shares rallied after the Group of 20 nations refrained from censuring the nation’s policies that have weakened the yen.

Toyota Motor Corp., the world’s biggest carmaker, rose 1.3 percent as the yen fell, boosting the earnings prospects for Japanese exporters. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., lost 0.8 percent in Hong Kong as internal e-mails showed the U.S. retailer had the worst sales start to a month in seven years as payroll-tax increases hit shoppers. BlueScope Steel Ltd. surged 15 percent after Australia’s largest steelmaker reported a smaller net loss.

The MSCI Asia Pacific Index added 0.6 percent to 133.67 as of 7:32 p.m. in Tokyo with about six stocks advancing for every four that fell. The measure is trading close to the highest level since August 2011. The MSCI Asia Pacific Excluding Japan Index was little changed at 481.8. Financial markets in China and Taiwan reopened today after lunar new year holidays.

“What we are seeing right now is currencies are not being manipulated, but currencies are just reflecting the natural outcome of monetary policy choices being made by countries,” said Andrew Pease, Sydney-based chief investment strategist at Russell Investment Group, which manages about $160 billion. “The Japanese rally in the share market and the sell-off in the currency have been only about talk, and I think the next phase is action.”

Deflation Fight

The MSCI Asia Pacific Index advanced 8.9 percent from the start of November through Feb. 15, led by Japanese shares, as Prime Minister Shinzo Abe pledged to beat deflation and pushed the central bank to ease monetary policy. Asia’s benchmark trades at 14.8 times estimated earnings compared with 13.7 for the Standard & Poor’s 500 Index and 12.3 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan’s Nikkei 225 Stock Average advanced 2.1 percent and the broader Topix Index rose 2.2 percent after halting a 13-week run of gains last week that was the longest such streak since 1973.

Hong Kong’s Hang Seng Index slid 0.3 percent. The Shanghai Composite Index fell 0.5 percent as Chinese retail sales during the week-long Lunar New Year festival rose at the slowest pace in four years. Taiwan’s Taiex Index rose 0.5 percent.

South Korea’s Kospi Index was little changed as data showed today the nation’s producer prices fell by the most in more than three years. Australia’s S&P/ASX 200 Index climbed 0.6 percent and New Zealand’s NZX 50 Index rose 0.4 percent. Singapore’s Straits Times Index gained 0.2 percent.

G-20 Chiefs

Japanese shares rallied after G-20 finance chiefs signaled the Asian nation has scope to keep stimulating its stagnant economy. Japanese exporters advanced as the yen dropped against all of its 16 major counterparts. A weaker yen boosts their overseas earnings when repatriated back home.

Toyota gained 1.3 percent to 4,785 yen and Canon Inc., a camera maker that gets 79 percent of its revenue outside Japan, rose 1.4 percent to 3,310 yen. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, advanced 4.9 percent to 533 yen and Sumitomo Mitsui Financial Group Inc., the second-biggest lender by market value, rose 5 percent to 3,820 yen.

Futures on the S&P 500 were little changed today after the measure slid 0.1 percent on Feb. 15. U.S. markets are closed today for the Presidents’ Day holiday. Industrial production in the U.S. unexpectedly fell 0.1 percent in January as factories took a breather after the biggest back-to-back gain in three decades.

Tax Increase

Li & Fung slid 0.8 percent to HK$10.12 as payroll-tax increases hit Wal-Mart shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News. The world’s largest retailer is struggling after executives expected a strong start to February due to the Super Bowl, milder weather and paycheck cycles, according to the minutes of a Feb. 1 officers meeting obtained by Bloomberg.

BlueScope jumped 15 percent to A$4.35, heading for the highest close since October 2011, after saying today its net loss narrowed to A$12 million ($12 million) in the six months ended Dec. 31 from A$530 million a year earlier. BlueScope stopped most exports from Australia, shut a mill and a furnace and cut about 1,000 jobs in the past two years to reduce costs.

Among other stocks that gained, Bumi Resources Tbk, which explores and exploits coal deposits, jumped 9.4 percent to 930 rupiah after a commissioner at Indonesia’s Financial Services Authority, said a change in the company’s ownership control of would require a tender offer. The comment came as a group of investors found buyers for their combined 13 percent stake

Westpac Banking Corp., Australia’s No. 2 lender by market value, gained 3.6 percent to A$30.20 after pricing A$2.1 billion of residential mortgage-backed securities, the biggest offering in the nation in 20 months.

Fast Retailing Co., Asia’s largest apparel retailer, climbed 2.1 percent to 25,390 yen in Tokyo, the highest since at least 1997, after a report the clothing retailer showed an interest in U.S.-based Gap Inc.

Of the 335 companies on the MSCI Asia Pacific Index that have reported quarterly earnings and for which Bloomberg has estimates, 51 percent exceeded profit expectations. That compares with the 70 percent of S&P 500 companies that topped profit forecasts, according to data compiled by Bloomberg.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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