Asian Stocks Gain, Pare Weekly Loss, on Weak Yen, Intel Margins

By Patrick Rial and Masaki Kondo

Jan. 16 (Bloomberg) -- Asian stocks rose, lifting the region’s benchmark index from a five-week low, as the yen weakened and an Intel Corp. report raised optimism that an earnings slump for chipmakers may be easing.

Hynix Semiconductor Inc., the world’s second-largest computer-memory chipmaker, jumped 4.6 percent after Intel, the world’s top maker of semiconductors, said inventory drawdowns that had eroded earnings may be ending and profit margins may improve later this year. Brother Industries Ltd., a Japanese maker of office equipment, soared 6.9 percent as the weaker yen signaled greater profitability for exporters.

“The weakening yen will help push up Japanese stocks,” Soichiro Monji, chief strategist at Daiwa SB Investments Ltd., which manages about $53 billion, said in an interview with Bloomberg Television. “There’s not much encouraging news about earnings, so the rebound won’t be big.”

The MSCI Asia Pacific Index gained 1.1 percent to 83.95 as of 9:23 a.m. in Tokyo. The gauge slumped 4.4 percent yesterday, its biggest drop since Dec. 2 and the lowest value since Dec. 8. The index is set for a 6.7 percent drop this week, the most since the period ending Nov. 21.

Japan’s Nikkei 225 Stock Average added 1.3 percent to 8,126.96. Mitsubishi UFJ Financial Group Inc., the country’s biggest lender by value, gained even after reporting a writedown on stock holdings of more than $3 billion.

Other regional markets open for trading also gained. U.S. stocks rebounded from intraday declines yesterday, with the Standard & Poor’s 500 Index finishing the day 0.1 percent higher, after sliding as much as 3 percent.

Stock Losses

The yen weakened to as much as 90.03 against the dollar today from 88.97 at the 3 p.m. close of stock trading in Tokyo yesterday. The dollar rose against the yen and euro after European Central Bank President Jean-Claude Trichet yesterday signaled he may cut interest rates again in March after the ECB reduced its benchmark rate by half a percentage point to 2 percent. A weaker yen boosts the value of overseas sales for Japanese companies.

Mitsubishi UFJ will book a loss of 288 billion yen ($3.2 billion) for the three months to Dec. 31 to write down its investment in Japanese stocks, it said yesterday after markets shut. The bank maintained its 220 billion yen profit forecast.

Intel yesterday reported a 90 percent tumble in fourth- quarter net income from a year earlier as gross margins fell to 53 percent. Margins may trough in the current quarter and rebound thereafter, the company’s chief financial officer said.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net. Masaki Kondo in Tokyo at mkondo3@bloomberg.net.