Asian Stocks Climb as Japanese Exporters Gain on Yen

By Jonathan Burgos & Adam Haigh

Asian stocks rose, with the regional benchmark index heading for a 20-month high, as Japanese exporters advanced after the yen weakened and increased sales of new homes in the U.S. added to signs the world’s biggest economy is recovering.

Nissan Motor Co. (7201), a Japanese carmaker that gets 79 percent of sales overseas, climbed 2 percent. SK Hynix Inc., the world’s second-largest maker of computer memory chips, rose 1.7 percent in Seoul after posting profit that beat analyst estimates. Huaneng Power International Inc. jumped 4.5 percent in Hong Kong, heading for a five-year high, as the Chinese electricity producer reported profit more than doubled. The MSCI Asia Pacific Index (MXAP) gained 1.1 percent 138.34 as of 1:02 p.m. in Tokyo, heading for its highest close since August 2011. Four shares rose for each that fell on the gauge. The measure climbed 5.8 percent this year through yesterday amid signs the U.S. economy is recovery as Japanese equities rallied on speculation the Bank of Japan will step up efforts to end deflation.

“The economy in the U.S. is hitting that sweet spot where it’s not bad enough to worry investors but not strong enough for theFederal Reserve to start withdrawing stimulus,” said Stan Shamu, a markets strategist at IG Markets Ltd. in Melbourne, a provider of trading services in currencies and equities. “It’s positive for the global economy. There are still heightened expectations of central-bank action.”

Weaker Yen

The Nikkei 225 Stock Average increased 1.7 percent, heading for its highest close since June 2008, as the yen fell to as low as 99.77 against the dollar, before rebounding to 99.40. A weaker yen boosts the value of overseas income at Japanese exporters when repatriated.

Australia’s S&P/ASX 200 Index jumped 1.5 percent. The nation’s consumer prices gained less than economists forecast last quarter, allowing the central bank scope to resume interest-rate reductions. New Zealand’s NZX 50 Index gained 0.7 percent after Reserve Bank Governor Graeme Wheeler kept borrowing costs unchanged today.

Hong Kong’s Hang Seng Index climbed 1.3 percent and China’s Shanghai Composite Index added 0.7 percent. South Korea’s Kospi index (KOSPI) and Taiwan’s Taiex Index both rose 1 percent.

Shares on the benchmark MSCI Asia Pacific Index traded at 13.9 times estimated earnings as of yesterday compared with 14.3 for the Standard & Poor’s 500 Index and 12.7 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The gauge climbed 1 percent yesterday as earnings from Travelers Cos. to Netflix Inc. beat estimates and new-home sales in the U.S. rose 1.5 percent in March.

False Report

A false report of explosions at the White House wiped $136 billion from the S&P 500 in about two minutes yesterday. The benchmark gauge was up 1 percent at 1:07 p.m. New York time when a posting on the Associated Press Twitter account said there had been explosions at the White House and President Barack Obama had been injured. The index erased almost the entire gain, recovering from the plunge within three minutes after the news service said its Twitter account had been hacked and there were no explosions.

Japanese exporters advanced. Nissan gained 2 percent to 1,055 yen. Fanuc Corp. (6954), a maker of industrial robots that gets about half of its revenue overseas, increased 1.2 percent to 15,360 yen. Tokyo Electron Ltd., Japan’s biggest manufacturer of chip-making equipment, rose 3.7 percent to 4,995 yen.

“A lot of the expectation for exporter earnings has been priced in, but forecasts are still conservative,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees about $102 billion. “Because companies are basing their forecasts on the assumption that the yen is near 80, we could see some big changes for this coming year.”

Earnings Performance

SK Hynix added 1.7 percent to 29,350 won in Seoul. The company reported a first-quarter net income of 178.7 billion won ($159 million). That compares with a loss of 271 billion won a year earlier and the 172 billion won average of 25 analyst estimates compiled by Bloomberg.

Of the 56 companies on the MSCI Asia Pacific Index that have reported results since April 1 and for which estimates are available, 52 percent exceeded expectations, while 46 percent fell short of analysts’ projections, according to data compiled by Bloomberg.

Huaneng Power (902) jumped 4.5 percent to HK$8.67 in Hong Kong, heading for the highest close since December 2007. The operator of coal-fire power plants in China posted first-quarter net income of 2.55 billion yuan ($413 million), compared with 919.36 million yuan a year earlier.

Among stocks that fell, Pharmaxis Ltd. (PXS) plunged 46 percent to 17 Australian cents, heading for a record low, after the pharmaceutical company said it won’t proceed with a regulatory submission for a new drug after clinical trials were unsuccessful.

To contact the reporters on this story: Jonathan Burgos in Singapore atjburgos4@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net

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