Asian Stocks Reverses Early Loss as Japanese Shares Rally on Yen

  • Yen drops after surging to strongest level since October 2014
  • Japan's Fast Retailing plunges after cutting profit outlook

Asian stocks rose, erasing an early loss, after Japanese shares posted their biggest rally in two weeks as the yen dropped for the first time in six days.

The MSCI Asia Pacific Index rose 0.1 percent to 126.04 as of 4:27 p.m. in Hong Kong, wiping out an earlier loss of as much as 1.4 percent. The measure headed for a gain of 0.1 percent for the week. The Topix index climbed 1.2 percent, the most since March 22, with exporters from Nissan Motor Co. to Nintendo Co. rising at least 1.7 percent as the yen weakened after Japanese Finance Minister Taro Aso said rapid currency movements are undesirable and action will be taken as needed.

“Investors are going to be trading stocks based on how the yen moves for a while longer,” said Masahiro Ichikawa, a senior strategist at Sumitomo Mitsui Asset Management Co. “The currency showing signs of weakness today has prompted repurchases in shares.”

Investors are pausing for breath at the end of a wild week that saw equities whipsawed as volatility in the $5.3 trillion-a-day foreign-exchange market climbed toward a 2011 high. An element of anxiety returned to financial markets after minutes from the Fed’s March meeting emphasizing concern over the global economy and International Monetary Fund chief Christine Lagarde signaling the organization is likely to lower its outlook for world growth.

Taiwan’s Taiex index climbed 0.6 percent. South Korea’s Kospi index fell 0.1 percent. Australia’s S&P/ASX 200 Index slid 0.5 percent. New Zealand’s S&P/NZX 50 Index retreated 0.4 percent. Singapore’s Straits Times Index lost 0.3 percent. Hong Kong’s Hang Seng Index increased 0.5 percent.

China’s Shanghai Composite Index fell 0.8 percent, sliding for a third day, the longest losing streak since January. Investors speculated next week’s inflation data will make it difficult for the government to further ease monetary policy.

Yahoo Japan Corp. jumped 6.4 percent on a Bloomberg News report that Verizon Communications Inc. is planning to make a first-round bid for Yahoo Inc.’s Web business next week and that the deal will include its stake in Yahoo Japan, according to people familiar with the matter. Fast Retailing Co. tumbled 13 percent after the Japanese clothing retailer cut its profit forecast. Iluka Resources Ltd. slipped 5.7 percent after the world’s biggest zircon producer lowered pricing for the second quarter.

Crude Rally

West Texas Intermediate crude climbed 3.5 percent in Friday trading, erasing Thursday’s decline, amid speculation about whether an accord can be reached at a meeting between OPEC members and Russia on freezing oil production.

E-mini futures on S&P 500 gained 0.6 percent on Friday. The underlying U.S. equity benchmark index dropped 1.2 percent on Thursday, the most since Feb. 23, as a measure of volatility had its biggest increase since January.

Before it's here, it's on the Bloomberg Terminal.