Asian Stocks Rise This Week as Nikkei 225 Breaks 15,000 on Yen

Asian stocks rose, with the regional benchmark index advancing for a second week, as Japan’s 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.

Toyota Motor Corp. (7203), the world’s biggest carmaker, advanced 6.9 percent, extending its gain for the year to 62 percent. Sony Corp. jumped 15 percent as activist investor Daniel Loeb pushed for a partial spinoff of the electronics maker’s entertainment unit. Tokyo Electric Power Co. soared 40 percent, the biggest gain on the MSCI Asia Pacific Index, on optimism Japan’s nuclear plants will be restarted. Singapore Airlines Ltd. slumped 4 percent after its fourth-quarter operating loss widened on lower passenger and cargo fares.

The MSCI Asia Pacific Index gained 0.5 percent to 142.51 this week, its highest weekly close since June 6, 2008. The measure has risen more than 10 percent this year as the Bank of Japan started unprecedented monetary easing and policy makers in the U.S. showed willingness to add stimulus. The MSCI Asia Pacific Index excluding Japan lost 1.1 percent this week.

“The rally, particularly in Japan, may continue as earnings recover,” said Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank, which oversees about $207 billion. “I don’t think there’s overheating in the market. Central banks are still pursuing quantitative easing, and that’s going to support further gains.”

Technical Indicators

While the MSCI Asia Pacific Index is trading at about 3.8 percent higher than its 50-day moving average, its 14-day relative strength index is at 62, according to data compiled by Bloomberg, below the 70 level some investors consider as a sign the market has risen too far, too fast.

The regional benchmark gauge trades at 14.3 times estimated earnings, compared with about 15.1 for the Standard and Poor’s 500 Index and 13.5 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan’s Topix Index (TPX), the broadest measure of Japanese stocks, rose 3.5 percent this week to close at a 4 1/2 year high, while the Nikkei 225 climbed 3.6 percent. Data showed first-quarter gross domestic product and March machinery orders exceeded estimates.

Australia’s S&P/ASX 200 Index slipped 0.5 percent, while South Korea’s Kospi Index increased 2.2 percent.

The Shanghai Composite Index gained 1.6 percent. Hong Kong’s Hang Seng Index, which was closed yesterday for a holiday, lost 1 percent this week. China’s industrial output and fixed-asset investment missed estimates this week, suggesting growth in the world’s No. 2 economy is slowing.

Japanese Exporters

The yen weakened 1 percent this week, passing 102 against the dollar. The currency slid after G-7 policy makers signaled tolerance of its depreciation and economic data suggested stimulus measures are boosting the economy. The BOJ unveiled a plan on April 4 to double the amount of currency in circulation to achieve 2 percent inflation within two years.

Toyota, which gets about 31 percent of revenue from North America, gained 6.9 percent to 6,470 yen. Canon Inc., the world’s biggest camera maker, climbed 6.3 percent to 3,780 yen.

Sony surged 15 percent to 2,046 yen, jumping as much as 10 percent on May 15 on reports that Loeb, the company’s biggest shareholder, proposed taking public part of Sony’s profitable entertainment unit and focusing on improving the electronics business.

Tokyo Electric surged 40 percent to 626 yen after Nomura Holdings Inc. raised ratings and price targets on some of Japan’s utilities amid expectations idled nuclear plants will be restarted. The Yomiuri newspaper cited Abe as saying the nation’s No. 1 utility shouldn’t take full blame for the Fukushima meltdowns.

Confident in Abe

Investors are more confident in a Japanese leader than at any time since at least September 2010. Abe’s policies are perceived more optimistically than those of his counterparts in the U.S., Europe and China, according to a worldwide poll of investors, analysts and traders who are Bloomberg subscribers.

Among declining shares, Singapore Airlines lost 4 percent to S$10.93 after its operating loss widened to S$44.2 million ($35 million) in the three months ended March from S$5.2 million a year earlier. The airline said passenger yields will probably remain under pressure and forward bookings for the next few months are “almost flat.”

In Sydney, WorleyParsons Ltd. tumbled 19 percent to A$19.50, the biggest single drop on the MSCI Asia Pacific Index this week. Australia’s largest oil and gas engineering company forecast annual net income of A$320 million to A$340 million on softening demand for resource infrastructure. The projection missed the A$372 million profit estimate of 13 analysts surveyed by Bloomberg.

Of the 495 companies on the Asia-Pacific gauge that have reported quarterly earnings since the beginning of April and for which Bloomberg has estimates, 53 percent beat projections.

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

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

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