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Asian Stocks Cap Best Week Since April on U.S., Japan Stimulus

Asian stocks rose, with the regional benchmark index capping its biggest weekly advance since April, after the U.S. and Japanese central banks signaled they will maintain measures to boost their economies.

Nissan Motor Co. (7201), the Japanese carmaker that gets about 34 percent of sales from North America, climbed 3.7 percent. Newcrest Mining Ltd., Australia’s biggest gold producer, jumped 13 percent as the price of the precious metal rose for the first time in four weeks. Chow Tai Fook Jewellery Group Ltd. advanced 9.4 percent in Hong Kong after the world’s largest jewelry chain reported an increase in sales.

The MSCI Asia Pacific Index rose 2.7 percent to 134.88 this week. The gauge has rebounded 7.9 percent from a 2013 low on June 25 as Federal Reserve Chairman Ben S. Bernanke said the U.S. will maintain accommodative monetary policy and the Bank of Japan pledged to maintain unprecedented measures to stimulus the economy.

“Economic growth in the U.S. will continue to improve and the Fed won’t start tapering until the end of the year,” Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank, which oversees about $207 billion, said by telephone. “The Bank of Japan will continue with monetary policy, fiscal policy and, with support in the upper house, hopefully growth strategies as well. We are quite positive on equities.”

‘Highly Accommodative’

Bernanke, who sparked a stock and bond rout in May after signaling the Fed’s asset buying could be reduced this year, said this week that “highly accommodative” monetary policy will be needed for the “foreseeable future.”

Minutes of the Fed’s June meeting showed that while “several members judged that a reduction in asset purchases would likely soon be warranted,” many want to see further improvement in the labor market before reducing the central bank’s $85 billion-a-month quantitative easing program.

Through yesterday the MSCI Asia Pacific Index has fallen 6.6 percent from a five-year high on May 20 amid concern the Fed will begin tapering its stimulus as China’s economy slows and Japan puts off unveiling economic reforms until after upper-house elections this month. Shares on the gauge yesterday traded at 13.2 times average estimated earnings compared with multiples of 15.2 for the Standard & Poor’s 500 Index and 13.2 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

BOJ Stays Course

The Bank of Japan maintained course on its unprecedented monetary stimulus at the end of its two-day policy meeting on July 11 and upgraded its view of the economy, referring to a recovery for the first time since before a record 2011 earthquake.

Japanese shares rallied for a fourth week, with the Topix (TPX) index gaining 1.1 percent this week and the benchmark Nikkei 225 Stock Average rising 1.4 percent. South Korea’s Kospi index advanced 2 percent, while Taiwan’s Taiex index jumped 2.7 percent.

Singapore’s Straits Times Index climbed 2.1 percent, extending gains for a third week, as the nation’s economy grew at the fastest pace in more than two years.

Australia’s S&P/ASX 200 Index (AS51) increased 2.7 percent, while New Zealand’s NZX 50 Index gained 1.8 percent. Hong Kong’s Hang Seng Index rose 2 percent, while the Hang Seng China Enterprises Index of mainland companies added 2.4 percent.

China’s Shanghai Composite rose 1.6 percent, extending gains for a second week, amid speculation the government will take measures to bolster the world’s second-largest economy after exports contracted by most since 2009 in June.

‘Targeted’ Policy

Chinese Premier Li Keqiang may announce “targeted” policy support measures in coming months, boosting investment in urban infrastructure, affordable housing and public services to bolster domestic consumption, Jian Chang, a Hong-Kong based economist at Barclays Plc, wrote in a note to clients.

Chinese developers gained this week. China Overseas Land & Investment Ltd., the biggest mainland developer traded in Hong Kong, jumped 7.5 percent to HK$21.55 in Hong Kong. China Resources Land Ltd. gained 5.8 percent to HK$21.80. Agile Property Holdings Ltd. increased 5.1 percent to HK$8.09.

Exporters also advanced. Nissan advanced 3.7 percent on the week to 1,095 yen in Tokyo. Samsung Electronics Co., the world’s biggest smartphone maker, climbed 3.6 percent to 1.312 million won in Seoul. James Hardie Industries SE (JHX), a building materials supplier that gets about 70 percent of sales from the U.S., rose 1 percent to A$9.86 in Sydney.

Gold, Oil

All 10 industry groups in the MSCI Asia Pacific Index advanced this week, with raw material producers leading the gains after gold posted its biggest weekly advance since October 2011, while copper and oil rose. Newcrest jumped 13 percent to A$12.09 in Sydney. BHP Billiton Ltd. (BHP), the world’s largest mining company and Australia’s No. 1 oil producer, climbed 5.4 percent to A$33.31.

Chow Tai Fook climbed 9.4 percent to HK$8.94 in Hong Kong. Same-store sales for the three months ended June 30 increased 48 percent from a year earlier, the company said on July 9.

ABC-Mart Inc. (2670) gained 7.3 percent to 4,320 yen in Tokyo this week after the Japanese shoe retailer reported first-quarter profit rose 15 percent.

Among stocks that declined, Asiana Airlines Inc. retreated 5.1 percent to 4,860 won in Seoul after one of its planes crashed at San Francisco International Airport on July 6. Three of the 307 people on board died.

Olympus Corp., the world’s biggest maker of endoscopes, fell 3.8 percent to 3,005 yen. The company plans to sell as much as 118 billion yen ($1.2 billion) of shares overseas.

To contact the reporter on this story: 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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