Asian Stocks Advance on Weaker Yen, Obama Policy Speculation

By Jonathan Burgos and Masaki Kondo

Feb. 6 (Bloomberg) -- Asian stocks rose, led by technology companies and banks, as the weaker yen lifted earnings prospects for Japanese electronics makers and as investors speculated the U.S. will announce its plan to ease the financial crisis.

Canon Inc., which gets a third of its sales from the Americas, advanced 3.9 percent in Tokyo as the yen traded near a four-weak low. Mizuho Financial Group Inc. gained 2.9 percent after a U.S. Treasury official said President Barack Obama’s financial-recovery plan will be unveiled next week. BHP Billiton Ltd., Australia’s largest oil company, added 0.9 percent in Sydney after crude jumped to the highest in a week.

“The yen’s depreciation is something investors are pleased with, because the stronger local currency is one of the main reasons Japanese companies have had to cut forecasts,” Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages about $53 billion, said. “People here are eagerly waiting for details of the U.S.’s financial bailout.”

The MSCI Asia Pacific Index rose 0.5 percent to 82.96 at 10:17 a.m. in Tokyo, with five stocks rising for every two that fell. The gauge has fallen 7.4 percent in 2009, extending last year’s record 43 percent tumble, as the credit crisis dragged the world’s biggest economies into recession.

Japan’s Nikkei 225 Stock Average climbed 1.8 percent, while Australia’s S&P/ASX 200 Index rose 1.4 percent. All markets open for trading advanced. In New York, the Standard & Poor’s 500 Index gained 1.6 percent.

Government Guarantee

The collapse of the U.S. housing market triggered more than $1 trillion in credit-related losses and writedowns at global financial companies. With banks tightening lending, bankruptcies among Japan’s listed companies reached an annual postwar record last year, according to Tokyo Shoko Research Ltd.

A U.S. Treasury official yesterday said Secretary Timothy Geithner will make a speech on Feb. 9 and Obama will hold a news conference that will address the stimulus package.

In addition to sinking more public funds into major financial companies, the plan is likely to include guarantees for illiquid assets on bank balance sheets and a so-called bad bank that would buy toxic investments, people familiar with the matter have said.

Canon, which is expecting 160 billion yen ($1.7 billion) in profit this year, jumped 3.9 percent to 2,535 yen as the weaker yen boosted the value of overseas sales. The company said it loses 9.1 billion yen for every 1 yen gain against the dollar.

The Japanese currency fell against the dollar to as much as 92.25, the weakest level since Jan. 8, from 89.28 at the close of stock trading in Tokyo yesterday.

BHP added 0.9 percent to A$31.90. Crude oil gained 2.1 percent in New York yesterday to the highest settlement since Jan. 30. A report from the U.S. Energy Department showed fuel consumption increased.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.