Japan leads Asian stock advance as yen pulls back, STI flat

A pedestrian looks at a share prices board of the Tokyo Stock Exchange in Tokyo, on April 5, 2016.
A pedestrian looks at a share prices board of the Tokyo Stock Exchange in Tokyo, on April 5, 2016. PHOTO: AFP

WELLINGTON/TOKYO (BLOOMBERG) - Japan drove gains in Asian shares on Tuesday (April 12) as the yen snapped its longest rally since 2012, providing respite for Japanese exporters.

The Topix index swung back to gains in Tokyo as the yen weakened for the first time this month, while the Korean won extended its march against the US dollar.

The MSCI Asia Pacific Index climbed 0.5 per cent as of 9:36 am Tokyo time, rising for a fifth straight day, its longest run of gains since October. The Topix was up 1.4 per cent while Japan's Nikkei 225 Stock Average - the second-worst performing developed market after Italy's in 2016 - gained 1.1 per cent.

Singapore's Straits Times Index was flat, dipping just 0.06 per cent at 2,807.47 as of 9:25 am.

In Australia, last session's rally in raw materials helped mining shares lead the S&P/ASX 200 index up 0.4 per cent while the Kospi index in Seoul added 0.3 per cent.

US crude lingered around US$40.30, while aluminum slipped after Alcoa, the biggest US producer of the metal, lowered its forecast for global demand.

"US stocks have managed to recover a fair amount but its difficult to assume that the market's priced in everything," Mitsuo Shimizu, an equity strategist at Japan Asia Securities Group in Tokyo, said by phone. "Once we get bad earnings results it's possible that we'll see more disappointment. In Japan, we need to be watching how conservatively companies assume this year's earnings. If it's worse than expected we might see more selling."

Concern growth is continuing to slow even as central banks step up efforts to revitalize the world economy has sapped momentum from the global equity rally as investors look ahead to the first-quarter earnings season. Analysts are projecting profits for companies in the Standard & Poor's 500 Index will contract 10 per cent, compared with calls for flat earnings growth at the start of the year. Oil traders, meanwhile, are jittery ahead of a meeting this weekend of major producers where an freeze in output will be discussed.

S&P 500 futures rose 0.1 per cent early on Tuesday, following the US benchmark's 0.3 per cent retreat last session. The index reversed a climb of as much as 0.8 per cent as consumer-staples and health-care stocks led declines. Futures on Hong Kong's Hang Seng and Hang Seng China Enterprises indexes were down at least 0.1 per cent in most recent trading.

"The market lacks enough conviction to move stocks in any one direction for any one amount of time long enough for investors to sink their teeth into and rack up performance," John Stoltzfus, chief market strategist at Oppenheimer & Co. in New York, said by phone. "There is an increased amount of skepticism and concern, mostly around earnings season. It boils down to a market that has to climb a wall of worry and has to earn its gains."