Asia Stocks Swing as Benchmark Trades Near 3-Month High

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Asia’s benchmark stock index swung between gains and losses after Japanese machinery orders accelerated less than expected and as investors await the outcome of the Federal Reserve’s meeting next week.

Toyota Motor Corp. dropped 1.1 percent, pacing losses among Japanese exporters as the yen rose for a second day. Drugmaker Sino Biopharmaceutical Ltd. tumbled 15 percent in Hong Kong after Credit Suisse Group AG cut its rating on the stock. Qantas Airways Ltd. (QAN), Australia’s largest carrier, climbed 2.5 percent after the Australian Financial Review reported it may share its Sydney terminal with unit Jetstar Airways.

The MSCI Asia Pacific Index was little changed at 137.67 as of 12:20 p.m. in Tokyo, trading near a three-month high. The measure, which swung between gains and losses of 0.1 percent today, climbed 6.6 percent in the past 10 days amid signs the global economy is improving. The rally drove the gauge’s 14-day relative strength index, an indicator of trading momentum, to 67, near a threshold of 70 that signals to analyst shares may have risen too far.

“We’re in wait-and-see mode ahead of next week’s Federal Open Market Committee meeting,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co. in Tokyo. “While the situation in Syria has calmed for now and China looks like it’s seen the worst of its slowdown, buying after the Olympics news seems to have run its course and the yen has stopped weakening, making exporters less attractive.”

The Federal Reserve has said any reduction in stimulus will be tied to a sustained recovery in U.S. employment. The central bank will decide to cut its $85 billion in monthly bond purchases when it meets Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg last month.

Interest Rates

The Reserve Bank of New Zealand, which kept its key interest rate at a record-low 2.5 percent today, said it is likely to raise borrowing costs in 2014. The Bank of Korea also kept its benchmark rate unchanged. Indonesia and the Philippines review rates today and the euro region is expected to report factory output fell in July. The U.S. issues jobless claims data.

Japan’s Topix (TPX) index slipped 0.5 percent. The nation’s machinery orders rose 6.5 percent in July from a year earlier after rising 4.9 percent in the previous month, according to a government report released today. That missed economist estimates for a 7.7 percent increase.

Regional Gauges

China’s Shanghai Composite Index (SHCOMP) was little changed, while Taiwan’s Taiex index added 0.2 percent. Hong Kong’s Hang Seng Index gained 0.4 percent and South Korea’s Kospi rose 0.5 percent. Singapore’s Straits Times Index increased 0.6 percent.

Australia’s S&P/ASX 200 Index added 0.3 percent, trading near a five-year high. The nation’s unemployment rate climbed to a four-year-high 5.8 percent in August from 5.7 percent in July as Australian employers unexpectedly cut payrolls, data released by the statistics bureau data showed. New Zealand’s NZX 50 Index advanced 0.1 percent.

The Topix surged 38 percent this year through yesterday, with Japanese equities performing the best among developed markets tracked by Bloomberg. Shares have jumped amid optimism Prime Minister Shinzo Abe and the Bank of Japan can lead the country out of deflation with stimulus and reforms.

The Hang Seng China Enterprises Index (HSCEI) of mainland Chinese companies traded in Hong Kong rose 0.6 percent. It has climbed 20 percent from a June 25 low, entering what some investors consider a bull market, as China’s manufacturing output accelerated to a 17-month high.

Futures on the Standard & Poor’s 500 Index lost 0.1 percent. The gauge gained 0.3 percent to a one-month high in New York yesterday as diminishing concern over a military strike against Syria offset Apple Inc.’s biggest decline since April after the company introduced a cheaper iPhone.

The MSCI Asia Pacific Index climbed 6.4 percent this year through yesterday. Shares on the Asia-Pacific gauge traded at 13.5 times estimated earnings, compared with 15.3 times for the S&P 500 Index, according to data compiled by Bloomberg.

 

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