Asian Stocks Recoup 2016 Losses on Stimulus and as Yen Weakens

China Outlook: Where Do They Go From Here?
  • Singapore central bank unexpectedly eases monetary policy
  • Japanese shares surge as yen weakens, buoying exporters

Asian stocks rose, with the regional benchmark index erasing this year’s losses, as Singapore’s central bank unexpectedly eased monetary policy and weakness in the Japanese currency drove equities higher in Tokyo.

The MSCI Asia Pacific Index advanced 1.6 percent to 132.10 as of 5:02 p.m. in Tokyo, up 0.1 percent this year and rising for a seventh day in its longest winning streak since April 2015. Materials and industrial shares led the 10 industry groups higher on the regional gauge, while gains were most pronounced in Tokyo stocks. Singapore’s Straits Times Index rose 0.9 percent, heading for its highest close in 4-1/2 months.

The Asian benchmark index has surged 17 percent since Feb. 12, with global equities also erasing 2016 losses, as data on Wednesday showed Chinese exports rose last month by the most in a year, adding to signs the economic slowdown in Asia’s biggest economy may not be as deep as some investors had feared.

“Central banks will continue to ease policy,” Nader Naeimi, Sydney-based head of dynamic markets at AMP Capital Investors Ltd., which oversees about $120 billion, said by phone. “The weakness that we’ve seen in the U.S. dollar and the fact that the Fed is going slowly now is allowing other countries to come out and ease. That is what we need. Pessimism around earnings growth had gone way, way too far. This rally has more to go.”

Japan’s Topix index gained 2.9 percent, heading for its best weekly gain since February, as the yen traded at 109.16 per dollar after sliding 0.7 percent on Wednesday. Electrical-appliance manufacturers and carmakers were the biggest boosts on the gauge.

Australia’s S&P/ASX 200 Index rose 1.3 percent. Gains in industrial metals and mining shares overnight followed through into Asia, with BHP Billiton Ltd. and Rio Tinto Group jumping 5.3 percent and 2.6 percent, respectively. The country’s jobless rate unexpectedly fell in March, data released Thursday showed, as employment rose more than forecast.

Hong Kong’s Hang Seng Index rose 0.9 percent, while the Hang Seng China Enterprises Index of mainland firms listed in Hong Kong gained 0.5 percent. The Shanghai Composite Index advanced 0.5 percent, extending yesterday’s 1.4 percent jump. JPMorgan Chase & Co. strategists led by Adrian Mowat upgraded Chinese shares to overweight, saying a stabilization in foreign currency reserves is yet to be reflected in valuations.

Kospi, Singapore

South Korea’s Kospi index increased 1.8 percent, its highest close since December, as stocks caught up with a global rally after Wednesday’s holiday. President Park Geun Hye’s ruling party suffered a setback in South Korean parliamentary elections, failing to win a majority in the legislature and undermining chances to enact her economic agenda in her final years in office.

Singapore’s Straits Times Index is heading for a 3.9 percent gain this week after jumping on Wednesday by the most since October 2011. The measure extended its advance today after the central bank unexpectedly said it will no longer seek appreciation for the local dollar against a basket of currencies. Twelve of 18 economists surveyed by Bloomberg had predicted no change in their policy.

Taiwan’s Taiex Index added 0.2 percent. New Zealand’s S&P/NZX 50 Index gained 0.7 percent to close at a record high. Markets in India, Sri Lanka and Thailand are closed for holidays Thursday.

E-mini futures on the Standard & Poor’s 500 Index slipped 0.3 percent after the underlying index gained 1 percent Wednesday. JPMorgan advanced 4.2 percent in New York after reporting first-quarter profit was boosted by pay cuts and trading revenue that declined less than most analysts predicted. Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., scheduled to release results this week, climbed at least 2.6 percent.

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