TOKYO: Asian stocks rose this week, with the benchmark index capping its eighth gain in nine weeks, as economic reports in the world’s two largest economies beat estimates and as a weaker yen boosted Japan’s exporters.
Sony Corporation, an exporter of consumer electronics, surged 17 per cent this week in Tokyo after announcing the sale of its New York headquarters for $1.1 billion. Li & Fung, a supplier to Wal-Mart Stores, dropped 14 per cent in Hong Kong after saying operating income slumped 40 per cent last year.
The MSCI Asia Pacific Index rose 0.7 per cent to 132.72 this week after last week snapping a seven-week winning streak. The regional gauge is extending its two-month rally amid signs US and Chinese economies are recovering and amid surge in Japanese stocks on speculation Prime Minister Shinzo Abe will pursue more aggressive stimulus policies.
“This rally can continue as the economic recovery in China and the US will support company earnings,” said Michiya Tomita, a Hong Kong-based fund manager at Mitsubishi UFJ Asset Management Co., which oversees $70 billion.
“Everyone seems to be bullish on the Japanese market, which also supports sentiment around Asia. The weaker yen will boost Japanese exporters’ earnings.”
Stocks on Asia’s benchmark index were valued at 14.3 times estimated earnings on average, compared with about 13.4 times for the Standard & Poor’s 500 Index and 12.1 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Japan’s Nikkei 225 Stock Average gained 1 per cent this week, while the broader Topix Index capped its longest weekly winning streak since 1986 as the yen fell to a 2 1/2 year low against the dollar. A weaker yen boosts overseas income at Japanese companies when converted into their home currency.