TOKYO: Asian shares rose for a sixth week, the longest winning streak since March, as investors bet governments in Japan and China will do more to spur growth.
Japan’s benchmark indexes capped their best annual advance since 2005 as exporters gained while the yen fell to a more-than-two year low against the dollar on prospects for more stimulus. Mazda Motor, an automaker that gets 28 per cent of its sales in North America, advanced 18 per cent in Tokyo this week. Chinese consumer companies rallied, led by department store owner Dashang Group Co. amid speculation China may introduce measures to boost consumption. Tokyo Electric Power Co. slid 8 per cent this week after being sued by eight US sailors for radiation exposure.
The MSCI Asia Pacific Index advanced 1.02 per cent to 129.61 this week. Japanese shares posted their biggest annual advance since 2005, after a report that the country’s consumer prices fell fanned speculation the central bank will respond to government calls for more asset purchases.
“Central banks are going to keep interest rates low and provide more stimulus that will keep equity markets propped up as it has done this year,” said Kumar Palghat, managing director and founder of Kapstream Capital, which oversees at least $5.2 billion.
Asia’s benchmark equities index rose about 19 per cent from this year’s low on June 4 as central banks from the US, Europe, Japan and China took action to spur economic growth. The gauge traded at 14.9 times average estimated earnings compared with 13.6 for the Standard & Poor’s 500 Index and 12.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Japan’s Nikkei 225 Stock Average advanced 4.6 per cent this week, taking its advance for the year to 23 per cent, the most since 2005. The gauge rose 20 per cent since Nov.14, when the former government said it would hold a general election in December and as a more pro-stimulus Liberal Democratic Party, led by Shinzo Abe, took power.
The rally since November added about $276.3 billion, equivalent to the annual gross domestic product of Malaysia, to the value of Japan’s stocks, according to data compiled by Bloomberg. The country’s markets are shut four days next week for the New Year holidays.