Asian Stocks Advance on China Trade as Yen Weakens; Crude Gains

Asian stocks rose to a 17-month high after China’s exports grew more than estimated and investors speculated Japan will expand stimulus. Commodities advanced, while the yen neared a 2 ½-year low against the dollar.

The MSCI Asia Pacific Index (MXAP) climbed 0.8 percent at 2:39 p.m. in Tokyo. Futures on the Standard & Poor’s 500 Index added 0.3 percent. The Nikkei 225 Stock Average gained 0.8 percent as the yen weakened against all its major peers. The euro retreated 0.2 percent versus the greenback before the European Central Bank meets to review borrowing costs today. Crude advanced 0.4 percent in New York and aluminum rose for a fourth day. Yuan forwards strengthened the most in a year.

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Pedestrians walk past the Bank of Japan headquarters in Tokyo, Japan. Photographer: Akio Kon/Bloomberg

China’s overseas sales rose 14.1 percent in December from a year earlier, almost triple the 5 percent gain predicted in a Bloomberg analyst survey, data showed today. Bank of JapanGovernor Masaaki Shirakawa said yesterday the central bank was in close cooperation with the government, spurring speculation policy makers will boost asset purchases when they meet Jan. 21-22. The ECB will probably keep its main refinancing rate at a record-low 0.75 percent, according to a Bloomberg survey.

“The Chinese data is a whole lot better than anyone expected,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “That will only add to recent investor optimism that the Chinese rebound has got legs.”

More than two stocks rose for each that fell on MSCI’s Asian gauge, with technology and financial companies leading the advance. Hong Kong’s Hang Seng Index (HSI) climbed 0.9 percent to its highest level since June 2011, while the Shanghai Composite Index added 0.5 percent. The Philippine Stock Exchange Index lost 1 percent, retreating from a record.

Mazda Upgrade

Aluminum Corp. of China Ltd. jumped 8.9 percent in Hong Kong, heading for its biggest advance since October 2011. Mazda Motor Corp. (7261) rallied 10 percent, leading gains among Japanese automakers, after Bank of America raised its rating on the stock to buy. Korea Electric Power Corp., which supplies all of South Korea’s electricity, rose 3.8 percent in Seoul trading after increasing power tariffs.

The S&P 500 advanced 0.3 percent yesterday. Fourth-quarter profit at companies in the index probably increased 2.9 percent, according to analyst estimates compiled by Bloomberg, extending a three-year expansion while marking the second-slowest quarterly growth since 2009.

The Japanese currency weakened 0.3 percent to 88.16 per dollar from yesterday, when it slid 0.9 percent, after Prime Minister Shinzo Abe urged the BOJ to double its inflation goal. The yen touched 88.41 on Jan. 4, the lowest level since July 2010. The yen declined 0.2 percent to 114.98 per euro, while the 17-nation shared currency lost 0.2 percent to $1.3041.

‘Economic Recovery’

“The Japanese government’s economic policy can prompt a sustained improvement in investor sentiment by weakening the yen before the recovery in the U.S. economy becomes definite,” said Naoki Kamiyama, an equity strategist at Bank of America Corp. in Tokyo. “It is a way to engineer an economic recovery.”

The Australian dollar climbed 0.4 percent to $1.0552 after touching $1.0555, its strongest since Dec. 18. Twelve-month yuan forwards strengthened 0.4 percent to 6.2763 per dollar in Hong Kong, the biggest gain since Jan. 18, 2012. The spot rate was 0.05 percent higher at 6.2228 in Shanghai, near a 19-year high of 6.2216 reached yesterday.

Chinese imports grew 6 percent after being unchanged in the previous month. The trade surplus almost doubled from a year earlier to $31.6 billion. The U.S. replaced the European Union last year as China’s largest export market, Zheng Yuesheng, head of customs statistics, said at a briefing today.

Treasuries Slide

Thirty-year Treasuries have almost wiped out 2012’s returns as investors prepared to bid at today’s $13 billion auction of the securities. U.S. 30-year bonds have handed investors a 2.3 percent loss in January as of yesterday, eroding last year’s 2.5 percent gain, according to Bank of America Merrill Lynch indexes. Thirty-year yields rose 0.2 basis points to 3.08 percent today.

Crude futures rose to $93.52 a barrel from $93.10 in New York. Copper for delivery in three months advanced 0.3 percent to $8,105.25 a metric ton in London, while aluminum added 0.7 percent to $2,090 a ton. Lead and zinc gained 0.7 percent.