Asian Stocks Climb as Japanese Shares Advance on Stimulus Bets

  • Topix gains 2.2% as ex-BOJ governor says easing to expand
  • China official factory gauge stabilizes near 3-year low

Asian stocks rose as a weaker yen boosted Japanese shares amid speculation about further monetary stimulus and as reports showed a stabilization in China’s manufacturing activity.

Toyota Motor Corp. climbed 2.6 percent and Mitsubishi UFJ Financial Group advanced 3.6 percent in Tokyo, the biggest contributions to gains on the regional index. OZ Minerals Ltd. surged 19 percent in Sydney after KKR & Co. lifted its stake in the owner of Australia’s biggest undeveloped copper deposit. Markets in Hong Kong and China are closed Thursday for holidays.

The MSCI Asia Pacific Index advanced 1.5 percent to 125.64 as of 3:57 p.m. in Hong Kong. The gauge slumped 15 percent in the three months ended September, its worst quarter since 2011. The Bank of Japan will probably need to add stimulus amid signals the economy has slipped back into recession, Kazumasa Iwata, a deputy governor for the central bank from 2003-2008, said in an interview. China’s official factory gauge stabilized around a three-year low, data showed.

“We’re still expecting the BOJ to be accomodative,” Stephen Davies, the CEO and founder of Javelin Wealth Management, told Bloomberg TV from Singapore. “We’ve got a BOJ put, so, further easing is on the way.”

Japan’s Topix index gained 2.2 percent. The central bank will announce decisions on monetary policy on Oct. 7 and again on Oct. 30. Data this week indicated the economy may have fallen into recession last quarter and prompted JPMorgan Chase & Co. and Credit Agricole SA to bring forward their forecasts for when the BOJ might add to stimulus.

The Tankan index of sentiment among large manufacturers fell to 12 in the third quarter, from 15 in the previous three months, the BOJ said. Economists had expected a reading of 13. Big companies across all industries plan to boost capital expenditure by 10.9 percent this fiscal year, more than the median economist estimate of 8.7 percent.

China’s official purchasing managers index climbed to 49.8 in September, the National Bureau of Statistics said Thursday, compared with the median estimate of 49.7 in a Bloomberg survey, which was also the level in August. Readings below 50 indicate contraction. A separate PMI gauge from Caixin Media and Markit Economics also showed improvement from its initial reading, with the final September number climbing to 47.2.

“Yes, the Chinese economy is moderating, but I don’t think we’re going to get
a hard landing,” Bob Parker, senior advisor at Credit Suisse Asset Management,
told Bloomberg TV in London. “A further relaxation in monetary and fiscal
policy is required” in China.

Singapore’s Straits Times Index added 1 percent. Australia’s S&P/ASX 200 Index rose 1.8 percent and New Zealand’s NZX 50 Index slipped 0.1 percent. South Korea’s Kospi index gained 0.8 percent and India’s S&P BSE Sensex Index rose 0.5 percent.

E-mini futures on the S&P 500 surged 1 percent. The Standard & Poor’s 500 Index rose 1.9 percent in New York Wednesday, its best rally in three weeks, paring its quarterly drop to 6.9 percent.

With almost $11 trillion erased from global shares in the past three months, investors now turn to Friday’s U.S. payrolls report for indications on whether the job market is strong enough to withstand tightening from the Federal Reserve.

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