By Jonathan Burgos - Jun 28, 2013 8:08 AM GMT+0400
Visitors look at an electronic board displaying stock figures at the Tokyo Stock Exchange in Tokyo. Photographer: Junko Kimura/Bloomberg
Asian stocks headed for their biggest three-day gain since December 2011, with the regional benchmark index paring the first quarterly slump in a year, amid signs the Japanese and U.S. economies are improving and assurances on stimulus efforts by the Federal Reserve.
Toyota Motor Corp. (7203), the world’s biggest carmaker, rose 2.4 percent in Tokyo, pacing gains among the exporters as the yen weakened. Mitsubishi UFJ Financial Group Inc., Japan’s No. 1, climbed 5.3 percent after the nation’s industrial output and retail sales exceeded expectations. Sands China Ltd., a Macau casino operator controlled by billionaire Sheldon Adelson, added 2.8 percent in Hong Kong after saying revenue from high-stake gamblers hasn’t declined as China’s economic growth slows.
Visitors look at an electronic board displaying stock figures at the Tokyo Stock Exchange in Tokyo. Photographer: Junko Kimura/Bloomberg
June 28 (Bloomberg) -- Takahiro Sekido, a strategist in Tokyo at the Bank of Tokyo-Mitsubishi UFJ Ltd. and formerly a Bank of Japan official, talks about the nation's economic outlook. Consumer prices excluding fresh food were unchanged in May from a year earlier, a report released by the statistics bureau in Tokyo showed today. Sekido speaks with John Dawson on Bloomberg Television's "First Up." (Source: Bloomberg)
June 27 (Bloomberg) -- Kathryn Koch, head of global portfolio solutions international at Goldman Sachs Asset Management, talks about emerging-market and Japan stocks. She speaks in Hong Kong with Rishaad Salamat on Bloomberg Television's "On the Move." (Source: Bloomberg)
June 27 (Bloomberg) -- Neil Dwane, chief investment officer for Europe at Allianz Global Investors, talks about stocks in the region, Asia and the U.S. Dwane also discusses the outlook for gold and European economies. He speaks in Hong Kong with Rishaad Salamat on Bloomberg Television's "On the Move." (Source: Bloomberg)
The MSCI Asia Pacific Index climbed 1.9 percent to 130.65 as of 12:56 p.m. in Tokyo, with all 10 industry groups on the measure rising. The measure is down 3.2 percent for June. U.S. shares rallied yesterday as reports showed consumer spending rebounded, pending home sales soared to the highest level since 2006 and jobless claims declined last week. Fed Bank of New York President William C. Dudley said the central bank may prolong its asset-purchase program should the economy fail to meet the Fed’s forecasts.
“The U.S. is recovering, but the rate of growth isn’t matching expectations,” Peter Esho, investment adviser in Sydney at Wilson HTM Investment Group, which oversees about $11.8 billion, said in a telephone interview. “The Fed know what’s happening on the ground so I think they will act within reason. The Japanese government is very serious at getting their economy back to a reasonable rate of growth. Japan will continue to surprise on the upside over the next few years.”
Liking Abenomics
Japan’s Topix index and the benchmark Nikkei 225 Stock Average both jumped more than 3 percent, extending gains for a second week. Reports today showed the economy strengthened in May as industrial production rose the most since 2011, retail sales climbed and consumer prices halted a six-month slide, bolstering Prime Minister Shinzo Abe’s push to end a deflationary malaise.
A survey published by the Nikkei newspaper this week found 55 percent of respondents approved of Abe’s economic policies, and 66 percent supported the cabinet. The paper surveyed 918 people by telephone between June 21-23 and did not give a margin of error.
South Korea’s Kospi index gained 1.4 percent and Taiwan’s Taiex index added 0.6 percent. Singapore’s Straits Times Index increased 1 percent and New Zealand’s NZX 50 Index rose 0.3 percent. Australia’s S&P/ASX 200 Index added 0.1 percent.Hong Kong’s Hang Seng Index advanced 1.2 percent.
China’s Shanghai Composite Index (SHCOMP) climbed 0.8 percent, heading for its first gain in eight days, ahead of the release of the June manufacturing purchasing managers’ index next week. Fitch Ratings yesterday cut its 2013 growth forecast for the world’s second-largest economy on concern a surge in money market rates will curb demand.
‘Rock Bottom’
“The Chinese market is close to a turnaround as sentiment is at rock bottom,” HTM Investment’s Esho said. “Even if there are issues around the financial system, there might be short-term fixes from the government.”
The MSCI Asia Pacific Index is headed for a second month of losses after China’s money-market rates surged to a record and Fed Chairman Ben S. Bernanke said policy makers may start dialing down U.S. stimulus. Shares on the gauge traded at 12.5 times average estimated earnings compared with 14.6 for the Standard & Poor’s 500 Index and 12.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The gauge yesterday advanced 0.6 percent, completing its biggest three-day rally since January.
Japanese exporters led gains as the yen headed for a second day of decline. A weaker yen boost the value of overseas income at carmakers and electronics manufacturers when repatriated.
Biggest Contributor
Toyota, the biggest contributor of the MSCI Asia Pacific Index’s advance today, gained 2.4 percent to 6,040 yen in Tokyo. Honda Motor Co., the Japanese carmaker that gets about 83 percent of sales overseas, rose 3.1 percent to 3,715 yen. Panasonic Corp., Japan’s second-biggest television maker, jumped 6.6 percent to 796 yen.
Nintendo Co., the world’s biggest maker of video-game machines, surged 5.8 percent to 11,570 yen as it plans to revive demand for its Wii U through the release of its own new titles as sales of the console failed to meet forecasts amid a lack of software.
Japanese lenders advanced. Mitsubishi UFJ climbed 5.3 percent to 619 yen. Sumitomo Mitsui Financial Group Inc. (8316), the nation’s second-largest lender by market value, advanced 3.7 percent to 4,585 yen. Mizuho Financial Group Inc. gained 4.1 percent to 205 yen.
Sands China rose 2.8 percent to HK$37.15 in Hong Kong. The company’s business is expected to be “very strong” going forward and the second half is traditionally better than the first, Sands China Chief Executive Officer Edward Tracy said. Mainland China holidays in the latter half of the year will boost growth, he said.
To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
