Asian Stocks Advance on Japan Stimulus, China Money Supply

By Patrick Rial

April 13 (Bloomberg) -- Asian stocks climbed for a third day after Japanese Prime Minister Taro Aso announced a record stimulus plan and a record level of loans in China caused a surge in the nation’s money supply.

Fuji Heavy Industries Ltd., the maker of Subaru cars, rose 2.7 percent as Japan’s proposal is set to provide subsidies for new car purchases. Hyundai Motor Co., South Korea’s largest automaker, jumped 4.5 percent. Audio-visual equipment maker Pioneer Corp., which has tripled in the last month, soared 12 percent. New lending in China rose to a record 1.89 trillion yuan ($277 billion) in March, helping the M2 measure of money supply expand 25.5 percent.

“Compared to previous packages it’s quite well targeted,” Richard Okuno, managing executive director at Rheos Capital Works Inc. in Tokyo, said in an interview with Bloomberg television, referring to Aso’s stimulus plan. “It’s certainly quite a lot of money.”

The MSCI Asia Pacific Index climbed 0.3 percent to 88.22 as of 9:39 a.m. in Tokyo, the highest since Jan. 12. The index has rallied 25 percent since dropping to a more than five-year low on March 9.

Japan’s Nikkei 225 Stock Average reversed an early decline to add 0.4 percent to 8,996.05, while South Korea’s Kospi index added 0.9 percent. Markets were closed in New York on April 10 for the Good Friday holiday. Hong Kong, Australia and New Zealand will be closed today.

Thailand, where anti-government protests forced the cancellation of the Association of Southeast Asian Nations summit and prompted Prime Minister Abhisit Vejjajiva to declare a state of emergency, will be closed until April 16 for New Years holidays.

New Stimulus

On April 10, Japan’s Aso announced his third stimulus plan since taking office, which will total 56.8 trillion yen ($566 billion) after adding financial measures and guarantees. The proposal includes a 1.6 trillion yen investment in low-carbon technology, 1.9 trillion yen on employment measures and 370 billion yen for subsidies of new car purchases.

China’s banks, which are mostly state-owned, have already met the bulk of the government’s target of at least 5 trillion yuan of new loans this year. The People’s Bank of China said the government’s stimulus package is showing initial results and it will continue to ensure sufficient liquidity after new loans surged sixfold to a record in March.

Toyota Motor Corp. added 0.5 percent to 2,830 yen even after a Nikkei newspaper report yesterday it may report a second-straight operating loss in the year ending March 31, 2010. Toyota’s operating loss likely expanded to about 500 billion yen in the fiscal year just ended, from a forecast 450 billion yen, the newspaper said.

Nippon Sheet Glass Co. added 1.7 percent to 297 yen after the Sunday Telegraph said the company may cut more jobs at U.K. glassmaker Pilkington amid declining demand from clients in the automotive and construction industries.

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