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Asia Stocks Gain for Third Week as Japan Recovers Lehman Losses

Asian stocks rose for a third week, with the Nikkei 225 Stock Average recouping losses from before the 2008 collapse of Lehman Brothers Holdings Inc., as U.S. reports added to optimism in the global recovery and Japan’s central bank officials said they will continue stimulus.

Toyota Motor Corp. climbed 3.4 percent, the most in five weeks, as the yen touched the lowest since August 2009. Mitsubishi Estate Co. soared 8.3 percent on speculation earnings at Japan’s biggest property developer will rise as the economy expands. China Overseas Land & Investment Ltd. (688) led Hong-Kong listed property developers lower as China tightened mortgage rules to limit price increases the property market.

The MSCI Asia Pacific Index (MXAP) advanced 0.6 percent to 135.56, extending gains for a third week as economic data from the U.S. added to signs the global economy is recovering, while Japan’s economy returned to growth and speculation grew its central bank will step up efforts to stimulate the expansion.

“We’re in a sweet spot for equities with lots of corporates in a much more solid position,” said James Lindsay, an Auckland-based fund manager at Tyndall Investment Management Ltd., which oversees about $23 billion. “Data releases in the U.S. have been more positive.”

The Nikkei 225 climbed 5.8 percent, the biggest weekly gain in 15 months, as the yen slid to a 3 1/2-year low and revised figures showed fourth-quarter gross domestic product rose an annualized 0.2 percent. Toyota climbed to 4,910 yen, the highest in a month.

Japan Stimulus

Mitsubishi Estate (8802), Japan’s biggest property developer, soared 8.3 percent to 2,654 yen as landlords seek rent increases and investors consider acquisitions while Prime Minister Shinzo Abe pursues fiscal and monetary stimulus. Sumitomo Realty & Development Co. gained 5.3 percent to 3,495 yen.

The MSCI Asia Pacific measure climbed 4.8 percent this year as central banks around the world maintained loose monetary policies to support economic growth. That pushed valuations to 15 times average estimated earnings compared with 13.9 for the Standard & Poor’s 500 Index and 12.6 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

In the U.S., the economy expanded at a modest pace across most of the country amid rising consumer demand for homes and autos, the Fed said in its Beige Book report, a summary and analysis of economic conditions in 12 U.S. districts. Federal Reserve Vice Chairman Janet Yellen said March 4 the central bank should press on with $85 billion in monthly bond buying.

‘Monetary Largess’

“The continued penchant for monetary largess by the major central banks around the world still does provide an unprecedented cushion for investors,” said Benjamin Yeo, Singapore-based head of Asian investment strategy at Barclays Plc’s wealth management unit, which has about $250 billion under management. “The risk-on mode will prevail for the remainder of 2013.”

China Overseas Land sank 3.1 percent to HK$22.40, leading Hong-Kong listed property developers lower. Swire Properties Ltd. (1972) declined 1.9 percent to HK$28.45 and Shimao Property Holdings Ltd. slid 8.1 percent to HK$14.38.

China on March 1 imposed its toughest curbs in a year, ordering the central bank to raise down-payment requirements and interest rates for second mortgages in cities with excessive price gains, enforcing a property sales tax and telling local governments with the biggest price pressures to tighten home- purchase limits.

China maintained its economic-growth target at 7.5 percent for 2013 and raised its budget deficit forecast as the government cuts taxes and boosts measures to support consumer demand. The median estimate of 43 analysts surveyed in February by Bloomberg News expected 8.1 percent growth in 2013.

Hong Kong’s Hang Seng Index advanced 0.9 percent on the week and Singapore’s Straits Times Index added 0.6 percent. Australia’s S&P/ASX 200 Index rose 0.7 percent and South Korea’s Kospi Index lost 1 percent. Asian funds posted inflows of $763 million in the week through March 6, Citigroup Inc. analysts wrote in a report March 8, citing data from EPFR Global.

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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