Asian shares rose as the Nikkei 225 Stock Average closed above 15,000 for the first time since 2007 after the yen touched a 4 1/2-year low against the dollar, boosting the earnings outlook for Japanese exporters.
Sony Corp. surged 10 percent as billionaire Daniel Loeb pushed for the initial public offering of the Japanese electronics maker’s entertainment business. Toyota Motor Corp. (7203), the world’s biggest carmaker, climbed 3.7 percent in Tokyo. Li & Fung (494) Ltd., a supplier of toys and clothes to retailers including Wal-Mart Stores Inc., jumped 8.4 percent in Hong Kong after UBS AG raised its rating on the stock.
The MSCI Asia Pacific Index gained 0.8 percent to 143.14 as of 6:20 p.m. in Tokyo, with about two shares rising for each that fell. The gauge increased 9.8 percent this year through yesterday as the Bank of Japan took steps to counter deflation and policy makers in the U.S. and Europe remained on standby to buoy growth.
“Every time the yen falls below a key level, the Nikkei passes another milestone because it boosts corporate profits, especially for manufacturers,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees the equivalent of $100 billion. “Stocks should rise further as investors acknowledge the impact of government policy. Given that, I don’t think stocks are that expensive.”
Shares on the MSCI Asia Pacific Index traded at 14.4 times estimated earnings yesterday, compared with 21 for the Nikkei 225, 15 for the Standard & Poor’s 500 Index and 13.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Japan’s benchmark Nikkei 225 jumped 2.3 percent to close at 15,096.03, the highest since Dec. 28, 2007. The broader Topix Index advanced 1.8 percent. The yen touched 102.43 per dollar, the lowest since October 2008, before trading at 102.39 at 5:08 p.m. in Tokyo.
The yen fell 18 percent against the dollar this year through yesterday as the Bank of Japan introduced unprecedented monetary easing and the U.S. economy showed recovery signs. A weaker yen enhances overseas earnings at Japanese exporters.
The Shanghai Composite (SHCOMP) gained 0.4 percent. Chinese Premier Li Keqiang signaled policy makers are reluctant to use stimulus to counter an economic slowdown. Hong Kong’s Hang Seng Index rose 0.5 percent and Taiwan’s Taiex Index advanced 0.8 percent. South Korea’s Kospi Index added 0.1 percent.
Australia’s S&P/ASX 200 Index dropped 0.6 percent after Treasurer Wayne Swan announced yesterday the government will record a A$19.4 billion ($19.2 billion) deficit this fiscal year and won’t balance its budget until the 12 months through June 2016. The Australian dollar dropped to an 11-month low.
Futures on the S&P 500 slid 0.2 percent today. The U.S. equity gauge rose 1 percent yesterday in New York to its eighth record high in the past nine sessions. Germany’s DAX Index advanced 0.7 percent to 8,339.11, a record high.
Sony jumped 10 percent to 2,072 yen in Tokyo. Chief Executive Officer Kazuo Hirai was asked by Third Point to consider selling as much as 20 percent of the Sony Entertainment unit in an IPO. The hedge fund led by Loeb holds 115 billion yen ($1.1 billion) of Sony shares.
Japanese exporters advanced. Toyota gained 3.7 percent to 6,440 yen. Panasonic Corp. climbed 5.4 percent to 898 yen. Canon Inc. rose 2.6 percent to 3,740 yen.
Li & Fung jumped 8.4 percent to HK$11.16 in Hong Kong, its biggest advance since November 2011. UBS raised the retail supplier’s rating to neutral from sell.
Esprit Holdings Ltd., a Hong Kong-based clothier that gets about 79 percent of sales from Europe, climbed 5.8 percent to HK$11.28 after saying said it will focus on curbing operating costs and improving profitability in the next six to 12 months.
Isuzu Motors Ltd. (7202) surged 21 percent to 872 yen in Tokyo, the biggest advance on the MSCI Asia Pacific Index. The maker of pickup trucks and diesel engines said operating profit in the year ending March 2014 will increase 38 percent to 180 billion yen. The projection beats the 152.9 billion average estimate of 10 analysts compiled by Bloomberg.
Of the 422 companies on the MSCI Asia Pacific Index that reported quarterly results since the beginning of April and for which estimates are available, 53 percent exceeded expectations, according to data compiled by Bloomberg.
Among stocks that fell, Noble Group Ltd. sank 1.8 percent to S$1.10 in Singapore. Asia’s largest publicly traded commodity supplier by sales said first-quarter profit plunged 62 percent from a year earlier due to losses at its agricultural unit.
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