Asian Stocks, Copper Climb as Yen Falls on U.S. Budget,

Asian Stocks, Copper Climb as Yen Falls on U.S. Budget

Asian stocks  climbed in the first session of 2013, extending last year’s 13 percent global rally, copper gained while Japan’s yen and the dollar weakened as U.S. Republican lawmakers gave up opposition to a budget compromise.

The MSCI Asia Pacific excluding Japan Index climbed 1.6 percent as of 11:30 a.m. in Hong Kong, heading for its highest close since August 2011. Equity markets in Japan and mainland China are closed today and tomorrow for public holidays. Copper in London gained 1.4 percent as oil in New York rose 0.6 percent. The yen tumbled 1.2 percent to 115.90 per euro and the Dollar Index, which tracks six peers, fell 0.5 percent.

A man rides his bicycle on the Pyrmont Bridge as commercial buildings stand in the central business district in Sydney, Australia. Photographer: Brendon Thorne/Bloomberg

House Republicans abandoned their effort to add spending cuts to the Senate’s budget legislation and one member predicted the measure will be passed tonight, removing one impediment to recovery in the world’s largest economy. China will work toward bolstering global growth this year, President Hu Jintao said in a New Year’s Eve address. South Korean manufacturing expanded for the first time since May in December, a survey showed.

“There’s optimism among investors that a temporary deal will be struck for now,” Vasu Menon, head of content and research at OCBC Bank Ltd. in Singapore, told Bloomberg Television. “This is somewhat of a relief. The slowdown in the economy has been priced in to markets to some extent and the weight of liquidity will help markets to head higher.”

Oklahoma Representative Tom Cole said he expects the House to pass the Senate bill unchanged with a “substantial” bipartisan vote. The House was said to have scheduled a final vote at 11:15 p.m.

Regional Indexes

More than six stocks climbed for each that fell on the MSCI Asia Pacific excluding Japan Index as all 10 industry groups rose, led by basic-material producers and technology companies.

Australia’s S&P/ASX 200 Index (AS51) gained 1.2 percent and South Korea’s Kospi Index added 1.4 percent. Hong Kong’s Hang Seng Index advanced 1.8 percent while a gauge of Chinese companies listed in the city surged 2.7 percent. Singapore’s Straits Times Index added 1.1 percent after the economy expanded more than economists estimated last quarter.

Techtronic (669) Industries Co., a maker of power tools that counts North America as its biggest market, gained 2.9 percent in Hong Kong. BHP Billiton Ltd., the world’s biggest mining company, advanced 1.6 percent in Sydney, leading gains among raw-material producers.

The MSCI Asia Pacific Index, which includes companies from Japan, increased 14 percent last year. The Asia-Pacific gauge trades for 15 times estimated earnings compared with the Standard & Poor’s 500 Index, which trades for 13.8 times and the Stoxx Europe 600 Index, valued at 12.7 times.

U.S. Stocks

China will “step up efforts to promote strong, sustainable and balanced growth in the world economy,” Hu said in a speech broadcast by state media. China achieved stable economic development in 2012 and will seek to do the same this year while making restructuring of its growth model a focus, he said.

A government gauge of China’s manufacturing released yesterday showed a third month of expansion, adding to signs of recovery in the world’s second-largest economy.

U.S. stocks surged on the last day of a year by the most since 1974 on Dec. 31, completing a 13 percent gain for 2012, the best since 2009. Gold extended a 12th annual gain, the longest streak since at least 1920.

The S&P GSCI gauge of 24 commodities rose 0.5 percent to the highest in almost a month today. Copper futures rose to a two-week high of $8,045 a metric ton as nickel climbed as much as 1.8 percent in London. U.S. crude advanced to $92.34 a barrel to the highest since October.

‘Risk-On’

The dollar weakened against most of its major counterparts while the yen fell to its weakest level in 2 1/2 years against the greenback and slid to an 18-month low versus the euro.

“This is a typical risk-on market, where the yen and dollar are sold,” said Satoshi Okagawa, a senior global markets analyst at Sumitomo Mitsui Banking Corp. in Singapore.

Treasuries are closed in Japan today and are scheduled to trade as usual in the U.K. Ten-year yields rose six basis points to 1.76 percent on Dec. 31, still capping the lowest-ever annual close.

The world’s leading economies will have $220 billion less sovereign debt to refinance in 2013, cutting supply after every major government bond market rallied for the first time since the 2008 financial crisis.

The amount of bills, notes and bonds coming due for the Group of Seven nations plus Brazil, Russia, India and China will drop to $7.38 trillion from $7.60 trillion in 2012, according to data compiled by Bloomberg. Japan, the U.K., Germany, France, Italy and Brazil will see a decline, while the U.S., Canada, Russia, India and China will face an increase.