Asian Stocks Rise on Weakening Yen, Profit Gains; Iluka Surges

By Shani Raja

Feb. 19 (Bloomberg) -- Asian stocks rose for the first time in four days as a weaker yen brightened the earnings prospects for Japanese exporters and Australian commodity producers reported higher profits.

Honda Motor Co., which gets half its revenue in North America, climbed 2 percent in Tokyo as the yen traded near its weakest this year against the dollar. Iluka Resources Ltd., the world’s biggest zircon producer, jumped 14 percent after second- half profit surged almost sevenfold. Fortescue Metals Group Ltd., Australia’s third-biggest iron ore mining company, rose 7.4 percent on speculation a Chinese company may buy a stake.

“With the yen depreciating, the headwind against Japanese exporter stocks will blow weaker today,” Juichi Wako, a strategist at Tokyo-based Nomura Securities Co., said in an interview with Bloomberg Television. “Trading has been stagnant lately, so we can’t expect a robust gain in the market.”

The MSCI Asia Pacific Index advanced 0.3 percent to 77.80 as of 9:59 a.m. in Tokyo. The measure dropped 13 percent this year, extending 2008’s record 43 percent tumble, as the credit crisis sent the world’s biggest economies into recession.

The Nikkei 225 Stock Average gained 0.6 percent to 7,579.78. Australia’s S&P/ASX 200 Index reversed an early drop, gaining 1.2 percent. New Zealand’s NZX 50 Index lost 0.4 percent.

In New York, the Standard & Poor’s 500 Index lost 0.1 percent as the Federal Reserve cut its growth forecast for the U.S. economy. Policy makers foresee the economic recovery could be delayed and “initially quite weak,” the central bank’s minutes released yesterday said.

Weaker Yen

The U.S. central bank separately said its industrial production index dropped 1.8 percent last month to the lowest level in more than five years.

Honda gained 2 percent to 2,295 yen. Canon Inc., the world’s largest camera maker, rose 1.7 percent to 2,355 yen.

The Japanese currency traded as weak as 93.85 against the dollar today from 92.39 at the close of stock trading in Tokyo yesterday. The yen sank to 93.96 late yesterday, the weakest since Jan. 7.

Japan’s broader Topix index has lost 13 percent so far this year, nearing the lowest since 1984. Because of dwindling demand and the yen’s gain over the past year, the gauge’s members forecast an 86 percent tumble in net income for the year to March 31, according to a Feb. 17 report from Shinko Research Institute Co.

Iluka surged 14 percent to A$4.49. The company’s second- half profit rose almost sevenfold to A$61.9 million, helped by higher mineral sands sales and the falling Australian currency.

Fortescue, rose 7.4 percent to A$3.21 after the Australian Financial Review reported Hunan Valin Iron & Steel Group, backed by China’s sovereign wealth fund, may invest A$3 billion ($1.9 billion). Fortescue said in a statement it had talks to explore investment opportunities, though they were incomplete.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.