Asian stocks rose, with Japan’s Nikkei 225 Stock Average closing at the highest in four years, as Toyota Motor Corp. raised its forecast and the yen weakened, boosting the earnings outlook for exporters.
Toyota, the world’s largest carmaker, jumped 6.1 percent after increasing its profit outlook to a five-year high. Mizuho Financial Group Inc. paced gains among lenders after Bank of Japan Governor Masaaki Shirakawa said he was stepping down before his term is up, raising optimism his replacement will be more aggressive fighting deflation. Galaxy Entertainment Group Ltd. led Macau casino operators lower after the U.K.’s Times newspaper said China will crack down on junket operators.
The MSCI Asia Pacific Index gained 1.1 percent to 133.08 as of 6 p.m. in Tokyo, with about two stocks rising for each that fell. The Nikkei 225 climbed 3.8 percent to the highest close since Sept. 29, 2008, two weeks before Lehman Brothers Holdings Inc. filed for the biggest bankruptcy in U.S. history.
“Japan’s recent strong equity market performance has substantially further to run as the market further discounts the positive impact” of Prime Minister Shinzo Abe’s policies, Jonathan Garner, chief Asia and emerging-market strategist at Morgan Stanley in Hong Kong, wrote in a report to clients advising investors to favor Japanese stocks. “We expect the market to trade more on positive earnings revisions, rather than purely tracking yen weakness.”
The Bank of Japan’s Shirakawa yesterday said he will step down on March 19, three weeks early, accelerating a leadership transition that may aid Abe’s campaign for aggressive easing that has helped the yen weaken against all other currencies since mid-November, driving the broader Topix Index up 30 percent through yesterday since elections were announced on Nov. 14. The yen touched 93.80 per dollar, the lowest level since May 2010.
Hong Kong’s Hang Seng Index rose 0.5 percent, while the Shanghai Composite added 0.1 percent. Taiwan’s Taiex Index rose 0.3 percent. Australia’s S&P/ASX 200 Index advanced 0.8 percent even after the nation’s retail sales unexpectedly fell for a third month in December, the longest stretch of declines in 13 years. South Korea’s Kospi Index slid 0.1 percent.
Standard & Poor’s 500 Index futures rose 0.2 percent. The gauge advanced 1 percent yesterday, rebounding from the biggest loss of the year for benchmark indexes, as earnings topped forecasts and Dell Inc. agreed to be taken private in the largest leveraged buyout since the financial crisis.
“In terms of earnings outlooks, we’re starting to see some positive momentum coming back,” said Tai Hui, Hong Kong-based chief market strategist for Asia at JPMorgan Asset Management, which has about $2.1 trillion under management. “The global macro environment has become more stable and the growth environment in Asia is starting to pick up. Combined with relatively attractive valuations, it gives us confidence that equities will perform well in 2013,” he told Bloomberg Television.
Toyota advanced 6.1 percent to 4,815 yen after Japan’s biggest manufacturer raised its forecast for net income in the year ending March by 10 percent to 860 billion yen ($9.2 billion). Nomura Holdings Inc. increased its share-price estimate for Toyota by 21 percent to 5,800 yen following the earnings announcement.
Japanese banks advanced. Mizuho Financial surged 5.2 percent to 202 yen. Mitsubishi UFJ Financial Group, Inc., the nation’s biggest lender by market value, gained 2.5 percent to 533 yen. Sumitomo Mitsui Financial Group Inc., Japan’s No. 2 bank by market value, climbed 1.9 percent to 3,830 yen.
Ibiden Co. jumped 22 percent to 1,511 yen in Tokyo, the largest advance among companies on the benchmark Asian index. The ceramic maker’s shares soared after it maintained its full-year profit forecast. The stock had fallen recently on expectations it would cut its outlook, according to Bank of America Corp. analyst Masashi Kubota.
DBS Group Holdings Ltd. sank 1.6 percent to S$14.96 in Singapore as Southeast Asia’s largest bank said fourth-quarter profit rose 4 percent, excluding a gain from the sale of a Philippine bank, missing analysts’ estimates as loan margins narrowed.
Of the 237 companies on the MSCI Asia Pacific index that have reported earnings so far this quarter and for which Bloomberg has estimates, 52 percent have exceeded profit expectations. About half missed sales projections, the data compiled by Bloomberg show.
Casino-operators Galaxy Entertainment slid 5.4 percent to HK$33 and Sands China Ltd. dropped 5.2 percent to HK$36.30 in Hong Kong. China’s government will start taking action later this month to clamp down on junket operators that bring gamblers from the mainland to Macau, the Times reported on its website, citing unidentified people in law enforcement.
By acting as middlemen and moneylenders, junket operators help drive the high-stakes, or VIP, business that accounts for about two-thirds of casino revenues in the world’s largest gambling hub.
Soho China Ltd., the biggest developer in Beijing’s central business district, slumped 8 percent to HK$6.32, the most since March 2009, after a Beijing Times report linked the company to money-laundering.
“We emphasize again that any accusations about us colluding in money laundering or kickbacks is rumor,” Soho Chief Executive Officer Zhang Xin said yesterday in a statement on her microblog which was confirmed by the company.