Asian Stock Index Rises as Japan Exporters Rally on Yen

Asia’s regional benchmark stock index headed for its first advance in three days, driven by a rally in Japanese exporters after the yen weakened past 102 versus the dollar. Stocks outside Japan declined.

Toyota Motor Corp., the world’s biggest carmaker, climbed 3.8 percent in Tokyo. Panasonic Corp. jumped 7.6 percent after Japan’s second-largest television maker said it will return to profit this fiscal year. Hyundai Merchant Marine Co., South Korea’s No. 1 shipping line, dropped 5.7 percent after reporting a loss.

The MSCI Asia Pacific Index gained 0.3 percent to 142.28 as of 6:20 p.m. in Tokyo. The gauge increased 9.7 percent this year through last week amid speculation the Bank of Japan will take more steps to beat deflation as policy makers in the U.S. and Europe remain on standby to buoy growth. Group of Seven officials indicated they will tolerate a sliding yen for now. The MSCI Asia Pacific Excluding Japan Index fell 0.8 percent to 480.89.

“The Japanese market will be well-supported given the continued weakening of the yen and the G-7 seems to be quite understanding of the aggressive stimulus Japan is delivering,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $126 billion, said by phone. “There’s a risk for a correction. Surely, the risk-reward ratio isn’t as attractive as what it was a few months ago when the markets were lower.”

Japan’s Nikkei 225 Stock Average gained 1.2 percent to its highest close since December 2007, while the broader Topix Index advanced 1.8 percent. The yen fell to as low as 102.15 against the dollar today, before trading at 101.73 as of 5:24 p.m. in Tokyo. A weaker currency boosts the value of overseas income at Japanese exporters when repatriated.

Chinese Data

South Korea’s Kospi Index increased 0.2 percent. New Zealand’s NZX 50 Index added 0.4 percent, while Australia’s S&P/ASX 200 Index added 0.1 percent. Taiwan’s Taiex Index lost 0.4 percent.

The Shanghai Composite Index slipped 0.2 percent, paring earlier losses of as much as 0.7 percent, as reports showed industrial output in April missed analyst estimates, while retail sales accelerated. Hong Kong’s Hang Seng Index fell 1 percent.

“We need more evidence that the economy in China is actually growing stronger,” Tim Leung, a portfolio manager who helps oversee about $1.5 billion at IG Investment Ltd. in Hong Kong, said before the reports were released. “The statistics from China are still looking soft.”

Shares on the MSCI Asia Pacific Index traded at 14.2 times estimated earnings on May 10, compared with 14.8 for the Standard & Poor’s 500 Index and 13.3 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

U.S. Futures

Futures on the S&P 500 lost 0.3 percent today. The gauge rallied to an all-time high last week on optimism the U.S. economy is improving amid central-bank monetary stimulus.

Japanese exporters advanced. Toyota gained 3.8 percent to 6,280 yen. Sony Corp., the maker of Bravia televisions and PlayStation game consoles, increased 3.8 percent to 1,855 yen. Canon Inc., the world’s biggest camera maker, rose 2 percent to 3,625 yen.

Panasonic jumped 7.6 percent to 806 yen. The company said last week it expects to achieve net income of 50 billion yen ($491 million) in the year ending March 2014, compared with a loss of 754 billion yen a year earlier. Credit Suisse Group AG estimated declines in the Japanese currency may add as much as 30 billion yen to earnings this year.

Earnings Performance

Of the 365 companies on the MSCI Asia Pacific Index that reported quarterly earnings since the beginning of April and for which estimates are available, 52 percent exceeded expectations, while 48 percent fell short, data compiled by Bloomberg showed.

Nippon Telegraph & Telephone Corp. gained 4.1 percent to 5,290 yen as Japan’s largest phone company forecast full-year profit that beat analyst estimates and announced plans to repurchase shares.

Kubota Corp. surged 17 percent to 1,671 yen, the biggest advance on the MSCI Asia Pacific Index, after the maker of farm equipment predicted sales and profit that for the current fiscal year that beat estimates.

Fraser & Neave Ltd., a Singapore-based developer controlled by Thai billionaire Charoen Sirivadhanabhakdi, rose 2.3 percent to S$9.08 after saying it would return S$4.73 billion ($3.8 billion) cash to shareholders.

Hyundai Merchant Loss

Among stocks that fell, Hyundai Merchant Marine slipped 5.7 percent to 9,810 won in Seoul, heading for its first decline in seven days. The company reported a 99.3 billion won ($89 million) loss in the three months ended March 31, extending losses for a sixth quarter.

Energy producers declined after crude oil futures dropped for a third day as the Organization of Petroleum Exporting Countries boosted output to the highest in five months. Cnooc Ltd., China’s biggest offshore oil producer, slid 2.4 percent to HK$14.40 in Hong Kong. Inpex Corp., Japan’s largest energy explorer, decreased 7.4 percent to 460,000 yen.

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