Asian Stocks Advance Ahead of Policy Meetings in U.S., Japan

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  • New Zealand equity benchmark index climb to fresh record
  • Nintendo sinks after saying impact from Pokemon Go limited

BOJ Policy: What Would Kuroda Do?

Asian stocks rose as investors awaited policy meetings by the Federal Reserve and Bank of Japan this week.

The MSCI Asia Pacific Index gained 0.1 percent to 134.11 as of 4:15 p.m. in Hong Kong. The BOJ is widely expected to add to stimulus at the end of a two-day meeting on July 29, with 32 of the 41 analysts surveyed by Bloomberg predicting policy makers will expand their record program. Futures traders see the odds of the Fed raising interest rates on Wednesday at just 10 percent.

“‘Equity markets may hold up this week ahead of the BOJ and Fed meetings on hopes that these central banks may sound dovish,” Vasu Menon, vice-president for wealth management research at Oversea-Chinese Banking Corp. in Singapore, said by phone. “The hope of future action from policy makers offers more support in the short term even though valuations may not be compelling.”

The MSCI All-Country World Index has recovered all losses from the U.K.’s shock vote to leave the European Union. By price-to-earnings, the measure is trading at its highest valuation this year. The Asian regional benchmark gauge has climbed 1.6 percent in 2016, while the S&P 500 Index closed last week at the highest level on record.

Best Performer

New Zealand’s S&P/NZX 50 Index, the world’s best performing developed market this year, advanced 1.3 percent to a fresh all-time high. Australia’s S&P/ASX 200 Index climbed 0.6 percent. India’s S&P BSE Sensex increased 0.8 percent toward an 11-month high. South Korea’s Kospi index added 0.1 percent. The Jakarta Composite Index rose 0.3 percent, heading for its first gain in three days.

The Philippine Stock Exchange Index rose 0.3 percent. The nation’s stock market shut before President Rodrigo Duterte delivered his first state of the nation speech. The benchmark index has jumped more than 12 percent since Duterte declared victory on May 10, standing just shy of a record.

China’s Shanghai Composite Index rose 0.1 percent, after falling as much as 0.3 percent earlier. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong declined 0.2 percent, while the city’s benchmark Hang Seng Index lost 0.1 percent.

Japan’s Topix index slipped 0.2 percent, erasing gains of as much as 0.9 percent.  Nintendo Co., which had soared 96 percent since releasing its mobile app Pokemon Go on July 6 through Friday, tumbled 18 percent after the game developer said that the financial impact from the worldwide hit Pokemon Go will be limited. 

Traders are also watching Japanese earnings, with the number of companies reporting set to peak this week. The nation’s exports dropped again in June, with shipments down for a ninth consecutive month, government data showed.

Hana Financial Group Inc. jumped 9.5 percent in Seoul as JPMorgan Chase & Co. raised its rating to outperform after the South Korean lender posted quarterly profit that beat analyst estimates. Takeda Pharmaceutical Co. climbed 2.4 percent in Tokyo following a report the Japanese drugmaker is exploring the potential sale of its majority stake in chemicals business Wako Pure Chemical Industries Ltd. 

Futures on the S&P 500 rose less than 0.1 percent. The U.S. equity benchmark index advanced 0.5 percent on Friday to post a fourth weekly gain.