Asian Stocks Rise as Japanese Exporters Gain on Weak Yen

Asian stocks rose, with the regional benchmark index heading for its first advance in five days, as Japanese exporters gained after the yen weakened, and China's central bank injected funds into the money market.

Toyota Motor Corp. (7203) climbed 2.9 percent in Tokyo as the yen's weakness boosted the outlook for export income. Daiwa Securities Group Inc., Japan's second-largest brokerage, rose 3.3 percent after posting earnings that beat analyst estimates. Jiangxi Copper Co., China's biggest producer of the metal, dropped 3.2 percent in Hong Kong after copper futures declined.

The MSCI Asia Pacific Index added 0.5 percent to 133.81 as of 5:42 p.m. in Tokyo, with almost two shares rising for each that fell. The gauge is headed for a 2.5 percent advance this month after China pledged to do more to support transition in the world's second-largest economy and earnings at companies from Daihatsu Motor Co. to Nomura Holdings Inc. beat analyst estimates.

"As the yen continues to weaken, profit at Japanese exporters will improve," said Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank, which oversees about $207 billion. "That should drive earnings upgrades, boosting the share market. The market will remain volatile as investors await Japan's economic reforms. The market is still hung up on the prospects of the Federal Reserve's stimulus tapering."

Japan's Topix index rose 1.8 percent to close higher for the first time in five days. The benchmark Nikkei 225 Stock Average climbed 1.5 percent.

Fading Optimism

The Topix has climbed 34 percent this year amid optimism Prime Minister Shinzo Abe will push through reforms while the Bank of Japan continues record stimulus to beat deflation. The gauge traded at 1.23 times book value, compared with 2.48 for the S&P 500 and 1.70 for the Stoxx Europe 600 Index.

"The market is range-bound," said Kenichi Kubo, a senior fund manager at Tokio Marine Asset Management Co., which oversees about $51 billion. "At the beginning of this year, stocks extended gains on widespread optimism, but it's not like that now."

Japan's factory output declined 3.3 percent in June, the most since March 2011 when the nation was hit by a record earthquake. That was lower than any forecast in a Bloomberg News survey of 29 economists whose median estimate was for a 1.5 percent drop. A separate report showed the jobless rate fell to 3.9 percent in June, the lowest since 2008.

Liquidity Boost

China's Shanghai Composite Index increased 0.7 percent, heading for its first advance in five days. The country's central bank conducted reverse-repurchase operations for the first time in five months, helping alleviate a cash squeeze that drove the benchmark interbank lending rate to a four-week high. The People's Bank of China added 17 billion yuan ($2.8 billion) to the financial system today at a yield of 4.4 percent using seven-day reverse repos, according to traders.

Hong Kong's Hang Seng Index increased 0.5 percent. South Korea's Kospi Index (KOSPI) added 0.9 percent, while Taiwan's Taiex Index gained 1 percent. Singapore's Straits Times Index added 0.4 percent and Australia's S&P/ASX 200 Index closed little changed. New Zealand's NZX 50 Index dropped 0.6 percent.

India's S&P BSE Sensex slid 1 percent, erasing gains of as much as 0.4 percent, after the nation's central bank left interest rates unchanged.

The Asia-Pacific gauge fell 7.8 percent through yesterday from this year's high on May 20 amid signs China's economic slowdown is deepening and on concern the Federal Reserve will start tapering monetary stimulus. Shares on the gauge traded at 12.9 times estimated earnings as of yesterday, compared with 15.3 times for the Standard & Poor's 500 Index and 13.5 times for the Stoxx Europe 600 Index.

U.S. Futures

Futures on the S&P 500 Index added 0.2 percent. The gauge fell 0.4 percent in New York yesterday as energy shares led losses amid a plunge in natural gas and a report showed a drop in pending home sales.

Japanese exporters rose after the yen fell as much as 0.5 percent today, heading for its first drop in four days. A weaker yen boosts the overseas income of the nation's carmakers and electronics manufacturers when repatriated.

Toyota, the world's biggest carmaker, climbed 2.9 percent 6,070 yen in Tokyo. Sony Corp., the maker of Bravia Televisions and PlayStation game consoles, increased 2.9 percent to 2,117 yen. Panasonic Corp. (6752), Japan's third-biggest TV maker, gained 2.3 percent to 864 yen.

Tencent Holdings Ltd. (700), China's biggest Internet company, jumped 4 percent to a record close of HK$363.60 in Hong Kong. The stock, which is leading gains in the Hang Seng Index this year, advanced 4.1 percent last week after U.S. companies in the sector surged. The company accounted for almost half of the Hang Seng Index's net increase today.

Earnings Performance

Daiwa Securities advanced 3.3 percent to 839 yen. Net income rose to 57.3 billion yen ($582.4 million) for the three months ended June 30 from 2.7 billion yen a year earlier, the company said in a statement yesterday. The results beat the average 51.1 billion yen estimate of six analysts surveyed by Bloomberg News.

Yakult Honsha Co. (2267), a maker pro-biotic and fermented milk drinks, surged 17 percent to 4,935 yen after saying first-quarter profit increased to 3.8 billion yen from 1 billion a year earlier.

Of the 152 companies on the MSCI Asia Pacific Index that posted results since July 1 and for which estimates are available, 55 percent exceeded analyst estimates, according to data compiled by Bloomberg.

Yanzhou Coal Mining Co. slumped 9.3 percent to HK$5.26 after China's fourth-largest producer of the fuel reported a preliminary first-half loss after forecasting a profit in April.

Raw-materials producers declined as copper and gold futures fell. Jiangxi Copper slipped 3.2 percent to HK$13.18 in Hong Kong. Zijin Mining Group Co., China's biggest gold producer, fell 3 percent to HK$1.64.

Woolworths Ltd. (WOW) dropped 1.6 percent to A$33.22 after Australia's largest retailer said challenging economic condition were evident in the second quarter.