Asian shares rose as stocks in Japan climbed to their highest level since December 2007 and yields on the nation’s 10-year bond advanced to the most in more than a year. South Korea’s won declined and palladium retreated.
The MSCI Asia Pacific Index added 0.8 percent at 1:12 p.m. in Tokyo as Japan’s Nikkei 225 Stock Average jumped 1.9 percent, breaching 15,000 for the first time since January 2008. Standard & Poor’s 500 Index futures were down 0.1 percent after the equity gauge advanced to a record yesterday. The yen rebounded from a 4 1/2-year low, while the won retreated 0.7 percent. The dollar traded near the strongest in five weeks against the euro as U.S. 10-year Treasury yields headed toward 2 percent for the first time since March. Japan’s 10-year rate climbed as high as 0.92 percent.
Sony Corp. surged as much as 14 percent as billionaire Daniel Loeb’s Third Point LLC hedge fund pushes for the Xperia smartphones and Bravia televisions maker’s breakup. Toyota Motor Corp., the world’s biggest carmaker, rose to pace gains among Japanese exporters, boosted by signs of recovery in the U.S. economy and a falling yen. Data on U.S. April producer prices and first-quarter euro zone GDP are due later today with the former expected to show declines from March, according to a Bloomberg News survey of economists.
“Momentum is building for a global stock rally,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc., a unit of Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest lender. “Downward pressure on the yen against the dollar is strengthening, boosting earnings outlooks, especially for exporters.”
About two stocks rose for every one that fell in the MSCI Asia Pacific Index. Toyota increased 2.4 percent while motorcycles maker Yamaha Motor Co. advanced 8.4 percent. The MSCI Asia Pacific Index has gained 11 percent this year versus a 16 percent rally by the S&P 500 and a 9.3 percent advance by the Stoxx Europe 600 Index.
Hong Kong’s Hang Seng Index advanced 0.5 percent, rebounding from its biggest two-day drop in a month. Li & Fung Ltd. jumped 7.4 percent after UBS AG raised its investment rating on the maker of toys and clothing. Sun Hung Kai Properties Ltd. gained 1 percent after the city said it will offer two residential sites for development.
The U.S. dollar traded at $1.2934 per euro from $1.2920 yesterday when it touched $1.2912, the strongest since April 5. The currency has gained as improving sentiment toward the U.S. economy spurred speculation the Federal Reserve will reduce stimulus.
The yen gained 0.3 percent to 102.16 against the greenback after sliding to 102.43, matching the weakest since October 2008. The yen’s 14-day relative strength index versus the dollar was at 29.8603, below the 30 level which indicates an asset’s price has fallen too rapidly and may be poised to reverse course.
The won dropped 0.7 percent to 1,113.95 against the dollar on speculation South Korean policy makers will weaken the currency to protect the nation’s exports against the yen’s slump. Yields on Japan’s 10-year bond rose 1.8 basis points to 0.88 percent. The last time yields touched 1 percent was in April 2012.
Palladium for immediate delivery declined 1 percent to $723.30 an ounce, dropping for the first time in three days. The price rallied to $732.40 yesterday, the highest level since April 12. The metal is up 3.5 percent this month, beating losses in gold and silver, as strike action in South African mines curbed supply and demand expanded.
Copper was little changed at $7,248 a ton, while zinc rose 0.2 percent and nickel climbed 0.3 percent.
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