Wednesday, 26 December 2012

Asian Stocks Advance as Yen Weakens to 27-Month Low

By Yoshiaki Nohara - Dec 27, 2012 6:11 AM GMT+0400

Asian stocks rose, with the regional benchmark index headed for a second month of advance, as Japanese shares rose to their highest this year after the yen slid to a 27-month low on prospects new Prime Minister Shinzo Abe will press for more stimulus.
Mazda Motor Corp. (7261), an automaker that gets 28 percent of its sales in North America, advanced 4.5 percent in Tokyo as a weaker yen boosted the earnings outlook for Japanese exporters. Mitsubishi UFJ Financial Group Inc. (8306)Japan’s biggest lender, advanced 1.8 percent. SK Telecom Co. dropped 4.7 percent as the mobile telephone carrier was among 119 companies trading without rights to year-end dividends on South Korea’s benchmark index.
The MSCI Asia Pacific Index gained 0.6 percent to 129.20 at 10:30 a.m. in Tokyo. About three stocks rose for each that fell on the measure, which has advanced 13 percent this year.
“Abe is keen on changing the Bank of Japan’s inflation target and getting the Bank of Japan to undertake aggressive quantitative easing,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “The market is expecting pretty significant stimulus out of the BOJ in the new year.”
The MSCI Asia Pacific Index advanced this year 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 14.7 times estimated earnings on average, compared with 13.7 for the Standard & Poor’s 500 Index and 12.7 for the Stoxx Europe 600 Index.

Overheating Sign

The Asia-Pacific gauge’s 14-day relative strength index, a measure of trading moment, rose to 73 today. A number above 70 threshold signals to some investors that shares are overbought.
The Nikkei 225 Stock Average added 1.4 percent, heading for the highest close since March 10, 2011, the day before a earthquake and tsunami devastated north eastern Japan and triggered meltdowns at a nuclear power plant. The yen fell against all 16 major counterparts, boosting the earnings outlook for Japan’s exporters.
The MSCI Asia Pacific excluding Japan Index gained 0.3 percent. Australia’s S&P/ASX 200 added 0.2 percent and New Zealand’s NZX 50 Index rose 0.3 percent in Wellington. South Korea’s KOSPI Index slid 0.2 percent.
Hong Kong’s Hang Seng Index rose 0.6 percent, the Shanghai Composite Index added 0.3 percent, and Taiwan’s Taiex Index (TWSE) increased 0.2 percent. Singapore’s Straits Times Index advanced 0.2 percent.
Standard & Poor’s 500 Index futures gained 0.1 percent. The gauge slid 0.5 percent yesterday as President Barack Obama and Congress prepared to resume budget talks and retailers slumped after the Christmas holiday.
To contact the reporter on this story: Yoshiaki Nohara in Tokyo at
To contact the editor responsible for this story: Nick Gentle at