Asian Stocks Advance as Japanese Shares Increase on Yen

Asian stocks rose, with the regional benchmark gauge advancing for a tenth day, as Japan’s Nikkei 225 Stock Average (NKY) capped its biggest annual gain since 1972 after the yen extended losses past 105 to the dollar.

Nikon Corp. (7731), a Japanese camera maker that counts North America as its biggest market, added 1.3 percent. Forge Group Ltd., an engineering services firm, soared 55 percent in Sydney as its contract at the Roy Hill mine starts. Nippon Paper Industries Co., Japan’s second-biggest company in the sector, slid 5.9 percent on a report operating profit probably dropped.

The MSCI Asia Pacific Index added 0.4 percent to 140.92 as of 9:36 p.m. in Tokyo, its longest winning streak since September. The index pared its December loss to 0.8 percent as the Federal Reserve this month announced the first cut to its record stimulus amid an improving economy and jobs market.

“The economic growth momentum in developed markets seems to be a stronger driver,” said Tim Leung, a Hong Kong-based portfolio manager who helps oversees about $1.5 billion at IG Investment Ltd. “The depreciation of the yen’s exchange rate as well as the Bank of Japan’s commitment to spur growth are strong drivers” for Japanese shares.

The Nikkei 225 rose 0.7 percent to complete a 57 percent advance this year, with today the last day of trading in Japan until Jan. 6. The Japanese currency touched 105.41 today, the weakest since October 2008.

Best Performers

Japanese shares have been the best performers this year among the 24 major developed markets tracked by Bloomberg as Prime Minister Shinzo Abe and the central bank acted to reverse deflation.

South Korea’s Kospi index rose 0.5 percent. Australia’s S&P/ASX 200 Index added 0.6 percent, while New Zealand’s NZX 50 Index was little changed. Singapore’s Straits Times Index rose 0.1 percent, and Taiwan’s Taiex index advanced 1 percent.

Hong Kong’s Hang Seng Index (HSI) was little changed, while the Hang Seng China Enterprises Index, also known as the H-share index, fell 0.5 percent. The Shanghai Composite Index fell 0.2 percent. China’s benchmark money-market rate will probably remain near a record high next quarter as policy makers seek to reduce debt, according to a Bloomberg survey.

Futures on the Standard & Poor’s 500 Index were little changed today. The measure fell less than 0.1 percent on Dec. 27 after benchmark indexes rallied to all-time highs amid optimism over the economic recovery.

The number of contracts to buy previously-owned homes in the U.S. probably rose 1 percent in November from October, after falling the previous five months, according to a Bloomberg survey of economists before data due today. A S&P/Case-Shiller gauge of housing prices in 20 cities jumped 13.5 percent in October from a year earlier, economists projected before a report due tomorrow.

U.S. Economy

“Market conditions won’t deteriorate much with the U.S. economy being positive,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank by market value.

Japanese exporters gained as the yen fell. Nikon added 1.3 percent to 2,009 yen. Komatsu Ltd. (6301), a construction machinery maker that gets 30 percent of its revenue in the Americas, rose 0.8 percent to 2,137 yen.

Nippon Sheet Glass Co. gained 4.6 percent to 137 yen, jumping the most on the Nikkei 225. The company was rated new outperform at Daiwa Securities Group Inc.

Nippon Paper

Nippon Paper slid 5.9 percent to 1,954 yen, leading declines on the equity gauge, after the Nikkei newspaper on Dec. 28 reported the firm’s operating profit in the nine months through December probably dropped 3 percent from the same period a year earlier.

Forge Group jumped 55 percent to A$1.585 after saying its contract in the Roy Hill project is worth about A$830 million ($734 million).

Kingbo Strike Ltd. surged 20 percent to 60 Hong Kong cents as shares of the engineering services provider debuted in Hong Kong.

The MSCI Asia Pacific Index gained 8.9 percent this year, trading at 14 times estimated earnings. That compared with 16.7 for the S&P 500 and 15.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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