Asian stocks rose, with the regional benchmark index heading for the biggest rally in more than a week, after a report showed the U.S. added more workers than expected. Japanese shares surged after a three-week, $600 billion rout.
Japan’s Topix index jumped 5.2 percent, the most since March 2011, after the Government Pension Investment Fund, the world’s biggest manager of retirement savings, said on June 7 it will sell bonds to buy more equities. Toyota Motor Corp., the No. 1 global carmaker, gained 8.6 percent. Yue Yuen Industrial Holdings Ltd., a shoemaker that gets 29 percent of its revenue in the U.S., rose 2.7 percent in Hong Kong. Sharp Corp. jumped 15 percent after Qualcomm Inc. agreed to a second purchase of the unprofitable Japanese TV maker’s shares.
The MSCI Asia Pacific Index added 1.2 percent to 131.97 as of 7:54 p.m. in Tokyo, the biggest gain since May 30. About three stocks gained for each that fell. Stocks also rose after Japan revised up its first-quarter growth and Prime Minister Shinzo Abe yesterday said the government will unveil its second growth strategy after the upper house election next month.
“The U.S. jobs data is giving the biggest boost to the market as it was strong, but not too good to stoke concern about scaling back stimulus,” said Kenji Shiomura, a Tokyo-based senior strategist at Daiwa Securities Group Inc., Japan’s second-largest brokerage. “Abe is reviving market optimism that we will have another big rally after the election.”
Asia’s equity benchmark fell to 129.87 earlier, extending its drop from this year’s high on May 20 to 10 percent. Shares have fallen on speculation that improvement in the U.S. economy will lead the Federal Reserve to scale back record stimulus.
The measure on June 7 traded at 12.7 times average estimated earnings, compared with 14.9 for the Standard & Poor’s 500 Index and 13 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
A gauge of consumer discretionary companies in the Asia-Pacific index led gains this year as Japanese shares rallied on a weaker yen and the promise of policies to end deflation. Energy companies had the biggest declines amid concern that China’s fuel demand will drop as growth slows.
The Topix is down 13 percent from a near five-year high on May 22. It’s still up 29 percent this year. The Bank of Japan, which announced unprecedented monetary easing in April, is to end a two-day policy meeting tomorrow.
Japan’s GPIF, which had 112 trillion yen ($1.14 trillion) under management as of Dec. 31, said it will cut its holdings of local bonds and buy more equities. The proportion of Japanese shares will increase to 12 percent from 11 percent, the Health, Labour & Welfare Ministry said.
New Zealand’s NZX 50 Index advanced 0.8 percent. South Korea’s Kospi index rose 0.5 percent. Taiwan’s Taiex Index rose 0.8 percent. Singapore’s Straits Times Index added 0.6 percent. Markets in Australia and China are shut for holidays.
Hong Kong’s Hang Seng Index gained 0.2 percent. A gauge of mainland Chinese companies capped its longest losing streak since March last year after data over the weekend underscored concern about the pace of growth in the world’s No. 2 economy.
Industrial production rose a less-than-forecast 9.2 percent from a year earlier and factory-gate prices fell. Export gains were at a 10-month low and imports dropped after a crackdown on fake trade invoices, while fixed-asset investment growth slowed and new yuan loans declined.
Futures on the S&P 500 Index added 0.4 percent today after the benchmark gained 1.3 percent on June 7, the biggest daily advance since April. U.S. employers took on 175,000 workers in May, the Labor Department reported on June 7. That was more than the 163,000 estimate in a Bloomberg survey.
Federal Reserve Chairman Ben S. Bernanke has suggested the central bank could curtail its $85 billion monthly bond purchases if the job market improved in a “real and sustainable way.”
Companies that do business in the U.S. rallied. Yue Yuen rose 2.7 percent to HK$20.65. Li & Fung Ltd., a supplier of toys and clothes to retailers including Wal-Mart Stores Inc., added 1.3 percent to HK$11.24.
Japanese exporters to America also advanced as the yen’s drop boosted their earnings prospects. Toyota climbed 8.6 percent to 5,950 yen. Mazda Motor Corp., a carmaker that gets about 29 percent of its revenue in North America, soared 11 percent to 379 yen.
Sharp jumped 15 percent to 462 yen. The TV maker will sell 6 billion yen of stock to Qualcomm to complete the second part of a capital alliance for developing displays.
Skyworth Digital Holdings Ltd. jumped 7.8 percent to HK$5 after its TV sales volume soared 68 percent in May from a year earlier.