Asian Stocks Rise on BOJ; China, Taiwan Fall on Bird Flu – Bloomberg

Asian stocks rose, with the Nikkei
225 Stock Average climbing to a 4 1/2-year high after the Bank
of Japan (8301)’s unprecedented stimulus. Chinese and Taiwanese shares
fell after more infections from a deadly new strain of bird flu.

Toyota Motor Corp., the world’s biggest carmaker, gained
4.1 percent as the yen weakened to its lowest level since June
2009 and all but seven of the companies on the Japanese gauge
advanced. EVA Airways Corp., Taiwan’s second-largest carrier,
slumped the most in 21 months in Taipei, dragging the nation’s
equities benchmark to the biggest slump since June.

The MSCI Asia Pacific Index gained 0.5 percent to 134.12 as
of 3:14 p.m. in Tokyo. The effects of yen weakness were muted on
the dollar-denominated regional benchmark index. The measure has
advanced the last five months as Japanese shares increased on
speculation the nation will deploy more stimulus and amid signs
the U.S. economy is recovering.

“With the currency weakening to the 98 yen per dollar
range, it’s almost 10 yen weaker than manufacturer estimates, so
exporters earnings may come in above expectations this earnings
season,” said Norihiro Fujito, a senior investment strategist
at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “The
speed at which the Japanese currency weakens is getting harder
to control by the government. That’s something that may be a
concern in the mid-term.”

Japan’s Nikkei 225 added 2.8 percent in local currency
terms and rose 1.4 percent when priced in U.S. dollars, after
unprecedented stimulus from the Bank of Japan’s new leadership
sparked a surge in Japanese shares. Trading volume was about 36
percent higher than the 30-day average, according to data
compiled by Bloomberg.

Bond Purchases

BOJ officials said April 4 the central bank will increase
its monthly bond purchases to 7.5 trillion yen ($76 billion),
exceeding the 5.2 trillion yen forecast by economists surveyed
by Bloomberg. They also suspended a cap on some bond holdings
and dropped a limit on debt maturities. They set a two-year
horizon for their goal of 2 percent inflation. Officials are
working to end 15 years of deflation.

Japanese exporters advanced. Toyota gained 4.1 percent to
5,300 yen, increasing for a fourth day. Honda Motor Co. (7267), which
gets about 80 percent of its sales outside of Japan, rose 3.7
percent to 3,805 yen. The yen fell to 98.54 per dollar. A
decline in the currency boosts the value of Japanese export
earnings when repatriated.

‘Strong Leadership’

What was “surprising was that the BOJ board voted almost
unanimously for these significant moves in such a short time
after the leadership change — indicating strong leadership by
Governor Haruhiko Kuroda,” said Michael Kurtz, Hong-Kong based
head of global equity strategy at Nomura Holdings Inc., Japan’s
largest brokerage. “These developments should all lend strong
support to Japanese equities. Even though monetary policy may
now remain unchanged for a while, the BOJ stands ready to take
further action in the case of any loss of economic momentum,
financial-market volatility or yen strengthening.”

Futures on the Standard & Poor’s 500 Index were little
changed. The gauge dropped 0.4 percent April 5 after data showed
the U.S. economy added less than half the number of jobs
economists forecast in March.

Taiwan’s Taiex Index retreated 2.4 percent as the market
reopened after a holiday, with trading volume about 17 percent
higher than the 30-day average for the time of day, as at least
six people died following the fatal bird-flu outbreak in China.
That’s the biggest drop in 10 months. EVA Airways slumped 6.8
percent to NT$16.45.

More Infections

China tried to ease concerns that a new strain of bird
influenza will spark an epidemic as authorities reported three
more infections of the deadly H7N9 virus that’s killed six
people since March. The outbreak of the virus caused soybean
futures and shares of Chinese companies traded in Hong Kong to
fall April 5 amid concern the disease will hurt demand in the
world’s second-largest economy.

“There’s going to be near-term pressure no matter how you
cut it,” said Marco Li, Hong Kong-based portfolio manager at
Manulife Asset Management, which oversees $238 billion. “You
have this overhang now, and until you get clarity, people will
see that as a potential risk for further exacerbation.”

Hong Kong’s Hang Seng Index added 0.1 percent. China’s
Shanghai Composite dropped 0.8 percent, reopening after a
holiday. The Shanghai measure has slumped in the past two months
amid concern steps to cool property prices will drag on economic
growth.

Airlines Rebound

Airlines listed in Hong Kong rebounded after slumping April
5. Cathay Pacific Airways Ltd., Asia’s largest international
carrier, rose 4.2 percent to HK$12.80. China Southern Airlines
Co. (1055) increased 2.1 percent to HK$3.96 and Air China Ltd., the
nation’s biggest carrier by market value, jumped 4 percent to
HK$6.29.

Australia’s S&P/ASX 200 Index rose 0.3 percent and South
Korea’s Kospi index slid 0.4 percent. New Zealand’s NZX 50 Index
retreated 0.8 percent and Singapore’s Straits Times Index lost
0.2 percent.

This year’s 3.7 percent advance on the MSCI Asia Pacific
Index (MXAP) left the measure trading at 13.6 times estimated earnings,
compared with a multiple of 14 for the S&P 500 and 12.3 times
for the Stoxx Europe 600 Index, according to data compiled by
Bloomberg.

To contact the reporters on this story:
Adam Haigh in Sydney at
ahaigh1@bloomberg.net;
Kana Nishizawa in Hong Kong at
knishizawa5@bloomberg.net

To contact the editor responsible for this story:
Nick Gentle at
ngentle2@bloomberg.net