Asian stocks rose for a fourth day, with Japanese shares gaining after the yen weakened as a report showed machinery orders beat estimates and amid a report Prime Minister Shinzo Abe is considering a corporate-tax cut.
Honda Motor Co. (7267), which gets 83 percent of sales from overseas, increased 1.7 percent, pacing gains among Japanese exporters. Sony Financial Holdings Inc., the financial services unit of electronics maker Sony Corp., jumped 3.1 percent in Tokyo after proposing a higher dividend. Newcrest (NCM) Mining Ltd. slipped 3.5 percent as brokers cut ratings on shares of Australia’s biggest gold producer.
The MSCI Asia Pacific Index added 0.5 percent to 134.81 as of 11:39 a.m. in Hong Kong, with about three shares rising for each that fell. Nine of the 10 industry groups increased on the gauge, which is headed for its longest winning streak in six weeks.
“The yen returning to the 97 level is positive and a corporate tax cut would be reflected on company earnings directly, so its impact on the market would be huge,” Toshihiko Matsuno, a strategist at Tokyo-based SMBC Friend Securities Co., a unit of Japan’s second-biggest lender by market value, said by telephone. “The U.S. economy isn’t doing too badly and the dollar was sold off too much.”
Abe called for a study of lower corporate taxes as a counterweight to a sales-levy increase, the Nikkei newspaper reported, citing unidentified people in the government. Japan may raise the consumption tax by three percentage points next year to rein in a national debt of more than twice gross domestic product.
Japan’s Topix index climbed 1.1 percent, with trading volume 35 percent below the 30-day average for the time of day. The Nikkei 225 Stock Average increased 1.6 percent. The nation’s core machinery orders increased 4.9 percent in June from a year earlier, exceeding economist estimates for a 2.6 percent gain, data release by the Cabinet Office today showed.
Hong Kong’s Hang Seng Index rose 0.7 percent, while China’s Shanghai Composite Index was little changed. South Korea’s Kospi index (KOSPI) added 1 percent and Taiwan’s Taiex index increased 0.8 percent. Singapore’s Straits Times Index gained 0.3 percent and New Zealand NZX 50 Index both advanced 0.1 percent. Australia’s S&P/ASX 200 Index rose 0.3 percent.
Reports due this week may bolster the outlook for the global economy. U.S. retail sales probably climbed for a fourth month in July, while industrial output in the euro region rose the most in June since 2011, according to surveys of economists by Bloomberg before data due today. A report tomorrow will probably show the euro zone economy grew for the first time in seven quarters in the three months to June 30, a separate poll showed.
The Bank of Japan released minutes of its July meeting today, saying it expects moderate growth in the economy.
“Market participants are hyper-sensitive to data right now,” Ravi Bharadwaj, a senior market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co., said by telephone. “Forward expectations are certainly helping the dollar to push sharp gains.”
Japanese exporters advanced as the yen fell 0.3 percent to 97.23 per dollar. Honda gained 1.7 percent to 3,790 yen and Toyota Motor Corp. (7203), Asia’s largest carmaker, added 1.6 percent to 6,290 yen. Camera maker Canon Inc., which gets 80 percent of sales outside Japan, rose 1.8 percent to 3,185 yen. The yen depreciated after a government report yesterday showed the nation’s economy expanded less than economists forecast in the second quarter.
The MSCI Asia Pacific last week declined 1.3 percent, snapping the longest weekly winning streak since January. The benchmark regional equities gauge traded at 13 times estimated earnings yesterday, compared with 15.3 for the Standard & Poor’s 500 Index and 13.9 times for the Stoxx Europe 600 Index.
About 51 percent of the companies on the Asia-Pacific gauge that have posted profits this earnings season beat analysts’ estimates, data compiled by Bloomberg show. Li & Fung Ltd., Tata Steel Ltd. and Ayala Corp. are among those scheduled to report earnings today.
Japan’s top-listed companies doubled earnings last quarter from a year earlier, with profit rising 103 percent and beating analysts’ estimates by 16 percent, the most in two years, data compiled by Bloomberg show. Companies topping estimates range from Toyota and Sony Corp. to Shiseido Co. and Kobe Steel Ltd.
Even after falling for the past three months, the Topix index is still up 32 percent this year through yesterday, retaining Japan’s position as the world’s best-performing developed equity market. The measure has risen amid optimism Abe will push through reforms while the Bank of Japan provides record stimulus in a bid to ignite a recovery in Asia’s second-largest economy.
Sony Financial soared 3.1 percent to 1,708 yen in Tokyo after saying it will increase its full-year dividend by 20 percent to 30 yen.
China Resources Land Ltd., the second-largest mainland developer traded in Hong Kong, jumped 4 percent to HK$23.50 as property shares extended yesterday’s gains.
Stockland sank 2.6 percent to A$3.71 after Australia’s biggest diversified property trust said full-year profit fell 79 percent as conditions in its residential business remained challenging.
Newcrest declined 3.4 percent to A$11.975. Deutsche Bank AG and Macquarie Group Ltd. analysts lowered their recommendations on the shares after the firm yesterday said cut costs further should prices keep declining. The gold producer booked a record full-year loss on a A$6.2 billion ($5.7 billion) writedown.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The U.S. benchmark slid 0.1 percent in New York yesterday after Japan’s economic expansion missed estimates and investors awaited today’s U.S. retail data for hints on when the Fed will curtail bond buying. Sales probably rose 0.3 percent after a 0.4 percent advance in June, according to a Bloomberg survey.