Markets

Asian markets up on growth reports

By Anna Kitanaka and Norie Kuboyama (China Daily)
Updated: 2010-09-06 11:41

TOKYO - Asian stocks rose, lifting the MSCI Asia Pacific Index to its biggest weekly increase in three, as Japan said it's ready to act to rein in the yen and reports showed growth in Chinese and US manufacturing.

Canon Inc, a Japanese camera maker that receives 82 percent of its sales abroad, gained 1.4 percent in Tokyo. Anhui Conch Cement Co, China's biggest cement maker, climbed 12 percent. BHP Billiton Ltd, the world's largest mining company and Jiangxi Copper Co, China's largest producer of the metal, both rose after metal prices increased. GS Yuasa Corp, which makes storage batteries, jumped 11 percent.

"Investors are kind of relieved because a downward spiral in the global economy had a pause last week," said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. "But investors won't jump into buying shares just because of that, since there is still a strong sense of uncertainty."

The MSCI Asia Pacific Index increased 2.7 percent to 119.99 last week, its steepest weekly advance since the five days to Aug 6, when the index closed at a three-month high. Since then the index has slumped about 2 percent as the yen's advance to a 15-year high against the dollar and disappointing US data fueled global growth concerns.

Japan's Nikkei 225 Stock Average climbed 1.4 percent and the Shanghai Composite Index increased 1.7 percent. Australia's S&P/ASX 200 Index advanced 3.9 percent after the nation's gross domestic product grew faster than economists estimated. South Korea's Kospi Index rose 2.9 percent even after the Bank of Korea said consumer confidence fell for the first time in five months.

Japan stimulus

Japanese exporters gained after Japan's government said it's preparing a new stimulus plan to help businesses threatened by the strong yen. A stronger yen cuts income at Japanese exporters when overseas revenue is converted into local currency.

Canon, the world's largest camera maker, advanced 1.4 percent to 3,550 yen in Tokyo. Sony Corp, which receives 73 percent of its sales outside of Japan, gained 1.9 percent to 2,485 yen. Nissan Motor Co., the carmaker which counts North America as its biggest market, rose 2.5 percent to 667 yen.

The Bank of Japan added 10 trillion yen ($118 billion) to a bank loan facility after a surge in the nation's currency to a 15-year high, threatened economic growth. Governor Masaaki Shirakawa said in a press briefing that the bank is ready to take more action if necessary, and cited risks to its view that the economy will remain on a recovery track.

Take 'bold' action

Finance Minister Yoshihiko Noda last week reiterated Prime Minister Naoto Kan's comments on Aug 27 that the Japanese government is ready to take "bold" action on the currency if necessary. Ichiro Ozawa, who is challenging Japanese Prime Minister Naoto Kan in this month's race to head the ruling Democratic Party, said intervention in currency markets to stem the yen's appreciation is a possibility on a TV Asahi program on Sept 3.

The MSCI Asia Pacific Index has declined 0.4 percent this year as Europe's debt crisis, China's measures to curb property- price inflation and disappointing economic reports in the US fueled concern global growth may stall. The decline cut the average price of shares in the gauge to 13.7 times estimated earnings.

Anhui Conch Cement, which makes all its revenue in China, jumped 12 percent to HK$30.45 in Hong Kong. James Hardie Industries SE, the biggest seller of home siding in the US, rose 1.5 percent to A$5.39 in Sydney.

Manufacturing in the US expanded at a faster pace than forecast in August, according to The Institute for Supply Management's factory index on Sept 2. China's purchasing managers' index rose to 51.7 from 51.2, also exceeding forecasts, a government-backed report showed on Sept 1.

"The excessive pessimism about the US economy is coming to a halt," said Juichi Wako, a senior strategist at Tokyo- based Nomura Holdings Inc. "The market was totally pessimistic, but a ray of sunlight has come out last week."

Shares of raw material producers posted the biggest advance among 10 industry groups on the MSCI Asia Pacific Index last week. BHP rose 2.8 percent to A$38.33 in Sydney. Rio Tinto Group, the world's third-biggest mining company, increased 6.5 percent to A$73.79. Jiangxi Copper rose 8 percent to HK$17.60 in Hong Kong.

Bloomberg News