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Asian Stocks Rise as Japan Exporters Gain; Olympus Gains

Published: January 15, 2013 | 6:53 am
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Asian stocks rose, with the regional benchmark index heading for the highest close since August 2011, as Japanese exporters gained after Bank of Japan Governor Masaaki Shirakawa said the central bank will pursue powerful monetary easing.

Olympus Corp. (7733), a maker of cameras and endoscopes, jumped 8.3 percent in Tokyo after Goldman Sachs Group Inc. raised the stock’s rating to buy. Billabong International Ltd. surged 16 percent as Australia’s largest surfwear maker received a takeover offer from VF Corp. and Altamont Capital Partners. LG Display Co. slid 3.1 percent in Seoul, pacing declines among Apple Inc. (AAPL) suppliers, after the Nikkei newswire reported Apple scaled back production plans for the iPhone 5.

The MSCI Asia Pacific Index rose 0.2 percent to 132.39 as of 2:18 p.m. Tokyo time, with about the same number of stocks rising and falling. The gauge is extending a rally for a third consecutive month after reports showed China’s economy is recovering and Japanese shares gained on speculation new Prime Minister Shinzo Abe will pursue more aggressive policies to stimulate the world’s third-largest economy.

“Broadly speaking, share prices in Asia will be higher in the next 12 months,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “We’ve seen too much enthusiasm over the past two months or so in light of a fairly muted recovery. The debt-ceiling negotiations in the U.S. is a substantial issue in the near term that the market has got to confront and that’s going to hold things back.”

Failure by U.S. Congress to raise the nation’s debt ceiling could “impose severe economic hardship” on the country, Treasury Secretary Timothy F. Geithner said. Extraordinary measures being taken to avoid breaching the limit would work only until mid-February to early March, he said.

Election Boost
The Nikkei 225 Stock Average (NKY) gained 0.8 percent, poised for its highest close since April 2010. The broader Topix Index rose 0.8 percent, extending a nine-week advance, the longest winning stretch since December 1989, after the yen fell to its weakest in more than two years yesterday.

“We believe Japanese equities still enjoy further upside given low valuations and prevalent underweight positions among global funds,” said Michael Kurtz, Hong-Kong based head of global equity strategy at Nomura Holdings Inc., Japan’s largest brokerage. Decisions on a new Bank of Japan governor and a proposed consumption tax increase “are likely to sustain further easing expectations, yen weakening, and other stimulus measures, to the support of Japanese equity prices.”

Nomura, Goldman Sachs Group Inc. and Bank of America Corp. are predicting Japanese stocks will extend their longest streak of gains in 23 years as extra economic stimulus boosts earnings.

Japanese Exporters
The yen dropped to as low as 89.67 per dollar yesterday, the weakest level since June 23, 2010, before rebounding to 89.06 as of 1:55 p.m. Tokyo time today. Speculation mounted that Prime Minister Abe will select a central-bank chief who will expand monetary easing, accelerating the currency’s decline. A weaker yen boosts overseas income for exporters when repatriated.

BOJ Governor Shirakawa, whose term ends in April, said the central bank will provide powerful monetary easing and monitor the impact of currencies on prices and the Japanese economy. He spoke at a BOJ branch managers meeting in Tokyo today.

Japanese exporters advanced. Nissan Motor Co., which gets about 79 percent of sales from overseas, climbed 1.3 percent to 884 yen. Sony Corp., the maker of Bravia televisions and PlayStation game consoles, added 1 percent to 993 yen. Panasonic Corp., Japan’s largest consumer-electronics maker, rose 2.9 percent to 567 yen.

Rating Raised
Olympus jumped 8.3 percent to 1,949 yen. Goldman Sachs raised its rating to buy from neutral, saying demand for cameras with interchangeable lens is growing.

China’s Shanghai Composite Index (SHCOMP) advanced 0.2 percent. Hong Kong’s Hang Seng Index lost 0.3 percent and Australia’s S&P/ASX 200 Index fell 0.1 percent. South Korea’s Kospi Index slipped 0.8 percent.

Billabong surged 16 percent to 98 Australian cents in Sydney. VF Corp. and Altamont Capital made a takeover offer for the surfwear maker that matches a A$527 million ($556 million) bid from Paul Naude, director of the company’s Americas division.

Apple suppliers (AAPL) declined after the Nikkei newswire reported that it scaled back orders for iPhone parts by about half this quarter due after sales missed targets.

LG, Sharp
LG Display slid 3.1 percent to 28,000 won in Seoul. Sharp Corp., Japan’s biggest maker of liquid crystal displays, lost 3 percent to 320 yen in Tokyo. Hon Hai Precision Industry Co., which assembles Apple’s iPads and iPhones, sank 2.9 percent to NT$84.70 in Taipei.

The MSCI Asia Pacific Index (MXAP) fell for the first time in eight weeks last week as a report showed China’s inflation accelerated. The gauge traded at 14.2 times estimated earnings, compared with 13.3 times for the Standard & Poor’s 500 Index and a multiple of 12 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg News.

Futures on the S&P 500 Index lost 0.2 percent today. The gauge yesterday declined 0.1 percent from near a five-year high as Apple’s slump amid concern about iPhone sales offset a rally in Dell Inc.


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