Asia Stocks Rise as Yen Drops on Abe; Tradewinds Jumps
Asian stocks rose, with the regional benchmark index trading less than 1 percent from its highest close for the year, as the yen dropped and Shinzo Abe was approved as Japan’s prime minister after promising to promote more stimulus measures.
Nissan Motor Co. (7201), a carmaker that derives almost 80 percent of sales overseas, gained 2.1 percent in Tokyo. Hitachi Ltd. rose 2.1 percent after its president said the company plans to double its operating margin. Tradewinds (Malaysia) Bhd., a palm oil and rice producer, jumped 15 percent in Kuala Lumpur after receiving a takeover offer.
The MSCI Asia Pacific Index added 0.2 percent to 128.66 at 7 p.m. in Tokyo with about two stocks rising for each that fell. The measure, which closed at a 16-month high of 129.39 on Dec. 19, gained 3 percent this month through yesterday. Equity markets in Hong Kong, Australia and New Zealand are closed today for holidays.
“I think the market will keep a strong momentum,” said Masaru Hamasaki, chief strategist at Toyota Asset Management Co., which oversees the equivalent of about 1.79 trillion yen ($21 billion). “The market focus will switch to what measures they will actually introduce and how much impact they can make, after stocks rose on expectations. The market will edge up from the current level if they meet expectations.”
The MSCI Asia Pacific Index climbed 13 percent this year as of yesterday as U.S. and Chinese economies showed signs of recovery and central banks around the world took action to shore up growth. The Asian benchmark trades at 14.6 times estimated earnings on average, compared with 13.8 times for the Standard & Poor’s 500 Index and 12.7 times for the Stoxx Europe 600 Index.
The 14-day relative strength index of the Asia-Pacific gauge was at 70 today, a threshold that some traders say signals a drop is likely.
Japan’s Nikkei 225 Stock Average rose 1.5 percent as the yen touched 85.36 per dollar, the weakest since April 2011. A weaker yen boosts overseas earnings at Japanese exporters.
The Shanghai Composite Index climbed 0.3 percent after advancing 2.5 percent yesterday. South Korea’s Kospi Index was little changed while data showed the nation’s consumer confidence failed to improve this month. Taiwan’s Taiex Index (TWSE) was little changed and Singapore’s Straits Times Index gained 0.4 percent.
Japan’s incoming Prime Minister Shinzo Abe, whose Liberal Democratic Party won a landslide victory in the Dec. 16 election, will appoint a cabinet today after the lower house named him premier. Abe has promised policies aimed at boosting growth and spurring inflation.
Japanese exporters advanced with Nissan rising 2.1 percent to 782 yen. Panasonic Corp., the maker of Viera televisions, gained 2.8 percent to 510 yen.
U.S. equity markets were closed for the Christmas holiday yesterday. The S&P 500 (SPXL1) dropped 0.2 percent in New York on Dec. 24 amid concern policy makers will fail to strike a budget compromise by year end to avoid more than $600 billion in spending cuts and tax increases, the so-called fiscal cliff. Hitachi rose 2.1 percent to 494 yen in Tokyo after President Hiroaki Nakanishi said yesterday is aims to double its operating margin to 10 percent or more. The firm is also in talks with Lithuania to build a nuclear power plant there, he said.
Tradewinds soared 15 percent to 8.92 ringgit, the biggest gain in more than five years, in Kuala Lumpur after receiving a takeover offer from companies linked to billionaire Syed Mokhtar Al-Bukhary.
Touei Housing Corp. and Arnest One Corp., Japanese condominium builders, jumped after announcing plans to merge with four other developers to counter rising competition and declining demand. Toei surged 25 percent to 1,292 yen and Arnest gained 24 percent to 1,492 yen.
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