Asia Stocks Rise for Third Week on Moves to Weaken Yen, Economic Reports

Asian stocks rose for a third straight week after Japan intervened to weaken the yen and U.S. and Chinese economic reports buoyed confidence global growth will strengthen.

Sony Corp. and Honda Motor Co., which get more than 80 percent of their sales abroad, climbed more than 6 percent in Tokyo as the weaker yen boosted exporters’ prospects. BHP Billiton Ltd., the world’s largest mining company, gained 2.5 percent in Sydney on speculation commodity demand will increase. Hon Hai Precision Industry Co., the world’s largest contract maker of electronics, jumped 6.5 percent in Taipei after saying August sales surged.

“We went through a patch of data that continued to disappoint investors, and now that appears to have reversed,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors Ltd., which manages $85 billion. “We had a benchmark weight exposure to Japan and we’re now going overweight. If the weaker yen is sustained, we’ll add to that.”

The MSCI Asia Pacific Index increased 2 percent to 124.26 in the past five days after China’s industrial output grew at a faster pace than economists estimated and higher-than-forecast U.S. wholesale inventories. The advance extended last week’s 1.5 percent gain, which was fueled by U.S. and Australian employment reports, and a rise of 2.7 percent the week before after data confirmed U.S. and Chinese manufacturing growth.

Yen Surge

South Korea’s Kospi Index climbed 1.4 percent and Australia’s S&P/ASX 200 Index advanced 1.7 percent. Hong Kong’s Hang Seng Index increased 3.4 percent in the week. Japan’s Nikkei 225 Stock Average rose 4.2 percent as the government acted on Sept. 15 to stem the yen’s surge to the strongest against the dollar in 15 years.

“The intervention was a surprise and well timed, so investors are putting money on exporters,” said Naoki Fujiwara, a fund manager in Tokyo who helps oversee about $6 billion at Shinkin Asset Management Co. “Companies that depend on internal demand are out of the loop.”

Sony, which gets 22 percent of its revenue from the U.S., gained 6.1 percent to 2,678 yen in Tokyo and Canon Inc., the world’s largest camera maker, climbed 2.7 percent to 3,850 yen.

Honda, which receives 46 percent of its revenue from North America, jumped 8.3 percent to 3,015 yen, while Toyota Motor Corp., the world’s largest carmaker, gained 4.5 percent to 3,085 yen.

Japan’s Finance Minister Yoshihiko Noda confirmed the action on the yen, which came after Prime Minister Naoto Kan held off a leadership challenge from a party rival. The yen weakened to 85.85 per dollar following the intervention on Sept. 15, after climbing as high as 82.88 per dollar earlier in the week, the strongest level since May 1995.

‘Vote of Confidence’

The government’s action on the yen came a day after Kan won re-election as the head of Japan’s ruling party, beating Ichiro Ozawa, who had specifically called for intervention to help shelter the nation’s exporters from currency appreciation.

“Kan winning the premiership was a vote of confidence that enabled him to intervene on the yen,” said Ayako Sera, who helps oversee about $310 billion in Tokyo as a strategist at Sumitomo Trust & Banking Co. “If the yen continues its reversal, it will put one of the biggest concerns for Japan behind us and we should see increased buying of exporters.”

Raw-material producers gained this week on optimism global growth will bolster demand for commodities as a statistics bureau report on Sept. 11 showed China’s industrial production gained 13.9 percent in August from a year earlier, more than the 13 percent median estimate of 29 economists.

BHP jumped 2.5 percent to A$38.90 as the London Metal Exchange Index of six metals including aluminum and copper advanced 3.3 percent. Rio Tinto Group, the world’s third-biggest mining company, advanced 1.7 percent to A$75.53. Newcrest Mining Ltd. rose 6.9 percent to A$41.50 as gold rose to a record during the week. Mitsubishi Corp., Japan’s biggest trading company, rallied 4.2 percent to 1,955 yen in Tokyo.

China Growth

“The data adds to confidence that China’s growth will stay at a sustainable rate,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors. “There’s no need for aggressive tightening and this shows no case for overall tightening policy.”

Komatsu Ltd., which counts China as its biggest market, rose 6.4 percent to 1,943 yen in Tokyo. Fanuc Ltd., the robotics maker which counts Asia excluding Japan as its biggest market, gained 5.9 percent to 10,270 yen.

The MSCI Asia Pacific Index has slumped 3.8 percent from this year’s high on April 15 amid concern Europe’s debt crisis, a faltering U.S. economy, and China’s steps to curb property- price inflation will derail a recovery. The declines have cut the average price of shares in the gauge to 14.2 times estimated earnings, which remains higher than the S&P 500 Index’s 13.5 times.

“There’s still a great deal of uncertainty,” said Tim Schroeders, who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne.

U.S. Economy

The MSCI Asia Pacific index has advanced 7.2 percent from a one-month low on Aug. 25 on optimism the U.S. economy will avoid slipping back into recession.

A government report Sept. 3 showed private payrolls climbed by 67,000 last month, more than the median forecast in a Bloomberg economist survey, while separate data on Sept. 9 showed weekly initial claims for unemployment benefits dropped to the lowest since July 9. Australia’s jobless rate fell to 5.1 percent from 5.3 percent, the nation’s statistics bureau reported last week.

Technology shares gained this week after Research In Motion Ltd., the Canadian maker of the BlackBerry smartphone, and Oracle Corp., the world’s second-largest software maker, reported better-than-estimated profits.

Technology Spending

Research In Motion reported second-quarter revenue and profit that beat analysts’ estimates on rising demand for advanced phones that can surf the Web and manage e-mail. Oracle also beat estimates as sales of database software and Sun Microsystems server computers helped it capitalize on a recovery in information-technology spending.

Hynix Semiconductor Inc., the world’s No. 2 computer-memory chipmaker, climbed 9 percent to 22,500 won in Seoul. HTC Corp., the world’s largest maker of mobile phones using Microsoft Corp. and Google Inc. operating systems, gained 11 percent to NT$746 in Taipei.

Hon Hai jumped 6.5 percent to NT$115 this week after saying non-consolidated sales almost doubled in August from a year earlier. The company’s Foxconn International Holdings Ltd. affiliate surged 8.4 percent to HK$5.54 in Hong Kong.