Japan drives Asian stock gains on stimulus bets after weak trade data, STI up 0.6%

An man sitting in front of an electronic board showing stock information at brokerage house in Fuyang, Anhui province, China on Oct 14, 2015.
An man sitting in front of an electronic board showing stock information at brokerage house in Fuyang, Anhui province, China on Oct 14, 2015. PHOTO: REUTERS

WELLINGTON (BLOOMBERG) - Asian stocks rose on Wednesday (Oct 21), led by Japanese equities amid speculation stimulus there will be bolstered after weak trade data fueled concern over the region's second-largest economy.

The gains in Tokyo helped the Asian benchmark rise for the first time this week, while the yen held near a one-week low after the slowest expansion in Japanese exports in more than a year sparked bets the central bank may boost its already unprecedented asset-purchase program when it next meets Oct 30.

The MSCI Asia Pacific Index added 0.4 per cent by 10:07 am in Tokyo as Japan's Topix index jumped 0.8 per cent, led by metal producers and appliance makers.

Singapore's Straits Times Index was up 0.56 per cent at 3,035.88 as of 9:41 am.

Stocks in South Korea and New Zealand joined in on the Japanese advance, with the S&P/NZX 50 Index up 0.3 per cent in Wellington, extending its longest run of gains since November last year. The Kospi index in Seoul added 0.6 per cent with markets in Hong Kong closed Wednesday for a holiday. The Taiex in Taiwan climbed 0.2 per cent.

Australia's S&P/ASX 200 Index was an outlier, falling 0.4 per cent in Sydney in a second day of declines, led by banks.

Crude oil's losses ahead of US stockpiles data saw the Malaysian ringgit extend declines into a fourth day.

"Whenever we get negative economic news, hopes for additional monetary easing moves the market," said Takashi Aoki, a fund manager at Mizuho Asset Management Co., which manages the equivalent of about US$33 billion. "We're starting to see hard evidence for our fears about the global economy being weak."

Japan unexpectedly posted a trade deficit for September as the slowdown in China's economy sapped demand for exports from Indonesia to Malaysia. As the end-of-October Bank of Japan meeting looms, about a third of the economists surveyed by Bloomberg are predicting the stimulus programme will be expanded.

Global monetary policy is firmly in focus for investors, with the European Central Bank set to meet on Thursday and bets the Federal Reserve will raise benchmark interest rates in 2015 lingering below 35 per cent.

Futures on the Standard & Poor's 500 Index rose 0.1 per cent, following a drop of 0.1 per cent in the US benchmark on Tuesday, the second straight day it's closed little changed.