Asian Stocks Extend Winning Streak on Weaker Yen, Oil Rally

By Patrick Rial and Shani Raja

Jan. 6 (Bloomberg) -- Asian stocks climbed, extending the regional benchmark index’s winning streak to nine days, as the yen weakened, crude oil rallied, and the Federal Reserve began purchasing mortgage securities to ease credit conditions.

Canon Inc., the world’s biggest maker of digital cameras, jumped 3.9 percent as the nation’s currency traded near a one- month low. BHP Billiton Ltd., the world’s No. 1 mining company, added 1 percent in Sydney after oil extended its gain to a third day. National Australia Bank Ltd., the country’s largest by assets, rose 3 percent as the U.S. Fed’s move helped narrow spreads between Treasuries and Fannie Mae mortgage bonds.

The MSCI Asia Pacific Index gained 0.7 percent to 91.78 as of 10:39 a.m. in Tokyo, set for the highest since Nov. 5 and longest winning stretch since August 2004. The benchmark posted a record 43 percent decline in 2008 as turmoil in financial markets dragged the global economy into a recession.

“We’re starting to see that it’s not going to be the end of the world,” said Pedro Marcal, a San Diego-based portfolio manager of the Allianz NACM Pacific Rim Fund at Nicholas- Applegate Capital Management, which manages about $8 billion. “You need a financial system for capitalism to work.”

Japan’s Nikkei 225 Stock Average rose 1.2 percent to 9,151.36. Benchmark indexes throughout the region climbed, except in Malaysia and Singapore.

U.S. stocks slipped yesterday, with the Standard & Poor’s 500 Index losing 0.5 percent before Senate Majority Leader Harry Reid said President-elect Barack Obama is reviewing stimulus plans worth as much as $1.3 trillion. An Obama aide today said the president-elect favors a plan worth about $775 billion. Futures on the S&P fell 0.3 percent today.

Yen, Oil

Canon, which gets almost 80 percent of its sales overseas, climbed 3.9 percent to 2,940. Sharp Corp., Japan’s biggest maker of flat-screen televisions, jumped rose 7.2 percent to 747 yen.

The yen depreciated against the dollar to as much as 93.60 today, the weakest level since Dec. 8, from 92.03 at the 11 a.m. close of stock trading in Tokyo yesterday. A weaker yen increases the value of overseas sales when revenue is repatriated.

Dimming earnings prospects in 2008 prompted investors to sell off automakers and electronics manufacturers, causing Toyota Motor Corp. and Sony Corp. to lose more than half their value last year. Toyota and rival Honda Motor Co. said today December U.S. sales plummeted by more than a third. Shares of both companies advanced.

Oil Rally

“The weaker yen and U.S. economic stimulus policies may provide a comeback opportunity for shares that plunged last year,” Mamoru Shimode, chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television.

Nippon Electric Glass Co. the world’s third-biggest supplier of glass for liquid-crystal displays, soared by its 80-yen daily limit, or 16 percent, to 579 yen. The Nikkei newspaper said the company will spend up to 3 billion yen ($32.2 million) to increase television-glass production facilities. Toshiba Corp. rose 5.9 percent to 396 after its Westinghouse Electric nuclear power unit signed contracts for plants worth $7.65 billion.

BHP rose 1 percent to A$31.93. Paladin Energy Ltd., which mines for uranium, soared 12 percent to A$2.96. Boart Longyear Ltd., a provider of drilling services to miners including BHP, jumped 7 percent to 23 cents in Sydney.

Crude oil for February delivery gained 5.3 percent yesterday to $48.81 a barrel, the highest settlement since Dec. 1. Israel’s battle against Hamas fighters in the Gaza Strip boosted concern oil supply in the Middle East, the source of one-third of the world’s supply, will be disrupted.

National Australia Bank gained 3 percent to A$20.83. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender by value, advanced 0.7 percent to 574 yen. KB Financial Group Inc., the owner of South Korea’s biggest bank, climbed 3 percent to 39,950 won.

Leighton, NGK

The Federal Reserve Bank of New York started buying mortgage-backed securities yesterday as part of a $500 billion program to support the U.S. housing market, without disclosing the amount purchased. The difference between yields on Washington-based Fannie Mae’s current-coupon 30-year fixed-rate mortgage bonds and 10-year Treasuries fell 21 basis points to 157 basis points, indicating credit markets are easing.

Leighton Holdings Ltd., Australia’s largest engineering and construction company, plunged 8.8 percent to A$25.84 after saying profit plunged 60 percent in the first half as the global financial crisis forced it to write down the value of its listed investments.

NGK Insulators Ltd., the world’s only producer of sodium- sulfur batteries, jumped 8.5 percent to 1,146 yen after a 10 billion yen sale of the batteries to the United Arab Emirates.

Semiconductor producers climbed after prices of the benchmark dynamic random access memory chips rose 5.5 percent yesterday, according to Dramexchange Technology Inc., Asia’s biggest spot market for chips. Hynix Semiconductor Inc., the world’s second-largest computer-memory maker, added 5.4 percent, while Elpida Memory Inc., Japan’s biggest, rose 4 percent.

To contact the reporters for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.