Stocks Rise With Euro on Inflation Rebound

Asian stocks rose, halting a two-day drop in the regional index, as Japanese equities jumped amid a weaker yen. The won led emerging-market currencies lower while Australia's dollar and copper futures gained.

The MSCI Asia Pacific Index added 0.6 percent by 9:49 a.m. in Tokyo as Japan's Nikkei 225 Stock Average (NKY) climbed 1.2 percent, set for the highest close since 2007. Standard & Poor's 500 Index futures rose 0.1 percent after the gauge closed at a record in New York. The yen traded near a four-year low versus the euro while the won and Malaysian ringgit lost 0.2 percent to the dollar. Australia's currency rebounded. Oil in New York was near a five-month low while copper futures rose 0.3 percent.

The correlation between the Nikkei 225 and the yen rose to a record Nov. 26 with the Bank of Japan signaling a willingness to boost monetary-easing measures while the Fed mulls cuts to stimulus. Japan and Hong Kong release retail sales reports today, while China posts industrial profits. U.S. jobless claims unexpectedly fell last week to a two-month low, data yesterday showed, while a consumer sentiment index exceeded estimates. U.S. stock and bond markets are closed today for Thanksgiving.

'While the consensus is for the U.S. to begin tapering quantitative easing in either March or June next year, more and more market participants are starting to see there's a risk it'll start earlier,' Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co. in Tokyo, said by phone. 'The U.S. economy is starting to improve.'

'New High'

Japan's broader Topix Index (TPX) gained 0.9 percent, rising for the first time in three days, while the Nikkei 225 headed for its highest close since December 2007, data compiled by Bloomberg show.

'There's a chance that the Nikkei 225 may reach a new high for the year at the close today,' Ichiyoshi Asset's Akino said.

Australia's S&P/ASX 200 Index (AS51) added 0.6 percent, advancing for the fourth time in five days, while the Kospi Index in Seoul increased 0.9 percent set for the highest close this month amid a fifth day of gains. South Korea's current-account surplus widened to a record in October, the central bank said today.

Initial claims for unemployment benefits in the U.S. fell by 10,000 to 316,000 in the week ended Nov. 23, the fewest in two months. Economists surveyed by Bloomberg predicted an increase to 330,000 from the previous period's 323,000. The Thomson Reuters/University of Michigan final index of consumer sentiment rose to 75.1 yesterday, from 72 in October and above the median estimate for a reading of 73.1, while durable goods orders dropped 2 percent, matching estimates.

Asian Data

Fed policy makers have been scrutinizing U.S. data to determine whether the economy is strong enough to withstand a reduction in their $85 billion a month of bond purchases. Four of five investors expect the Fed to delay a decision to begin reducing stimulus until March 2014 or later, according to a Nov. 19 Bloomberg Global Poll.

Futures on Hong Kong's Hang Seng Index gained 0.2 percent in their most recent trading session, while contracts on the Hang Seng China Enterprises Index added 0.3 percent. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York gained 1.1 percent, led by technology and Internet companies.

Profits at Chinese industrial companies rose 13.5 percent in September, with data for October scheduled for today. Hong Kong retail sales probably climbed 7.3 percent in value last month from a year earlier, according to a Bloomberg survey of economists before a report also due today.

Dollar Index

The yen was steady at 138.63 per euro after sliding 0.9 percent versus the common currency yesterday to the weakest intraday price since June 2009. Japan's currency was little changed at 102.16 per dollar following yesterday's 0.9 percent drop. Retail trade in Asia's second-biggest economy grew a more-than-expected 2.3 percent last month from a year earlier.

The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major counterparts, was little changed today after climbing 0.3 percent yesterday, the second day of gains this week.

'The dollar is benefiting from a very small risk of taper in December,' Omer Esiner, chief market analyst in Washington at the currency brokerage Commonwealth Foreign Exchange Inc., said by phone.

The won lost 0.2 percent to 1,062.79 per dollar, weakening a second day. The Bank of Korea said in a report released yesterday that the currency's gains versus the yen may hurt exporter profits. The ringgit dropped 0.2 percent to 3.2354 a dollar.

Aussie Climbs

Thailand's central bank unexpectedly cut benchmark interest rates yesterday amid escalating anti-government protests. The baht weakened 0.1 percent to 32.135 per dollar today, after sliding almost 2 percent over the past seven days.

The Australian dollar, dubbed the Aussie, jumped 0.4 percent to 91.19 U.S. cents after dropping a sixth day yesterday to a 2 1/2-month low. New capital expenditure in Australia rose 3.6 percent in the third quarter, after economists predicted a 1.2 percent decline.

Yields on 10-year Treasuries were little changed at 2.74 percent after climbing three basis points, or 0.03 percentage point in New York yesterday. Australian bonds due in a decade yielded 4.25 percent, with rates advancing five basis points in the first rising day this week.

No Bubble

The S&P 500 added 0.3 percent to an all-time closing high of 1,807.23 yesterday, while the Dow Jones Industrial Average climbed 0.2 percent, also closing at a record. The Nasdaq Composite Index (CCMP) extended gains beyond the 4,000 level to the highest close in 13 years.

Former Fed Chairman Alan Greenspan said the U.S. economy probably will grow more slowly next year than some forecasters predict, and indicated that record-high U.S. stocks doesn't mean there's a bubble.

'This does not have the characteristics, as far as I'm concerned, of a stock-market bubble,' Greenspan said in an interview on Bloomberg TV's 'Political Capital with Al Hunt,' airing this weekend. 'It could come out that way but I don't see it at this stage.'

The U.S. economy is forecast to expand 2.6 percent next year, following a growth rate of 1.7 percent this year, according to a Nov. 8-13 Bloomberg survey of 73 economists.

Commodity Moves

WTI crude lost 0.1 percent to $92.25 a barrel, after sliding 1.5 percent yesterday to the lowest settlement price since June 21. The spread between WTI and Brent crude was the most in eight months.

Crude supplies rose 2.95 million barrels to 391.4 million last week, the highest level since June, the U.S. Energy Information Administration said yesterday. The report was forecast to show a 750,000-barrel gain, according to a Bloomberg survey of energy analysts. U.S. crude production increased 45,000 barrels a day to 8.02 million, the highest level in almost 25 years.

Gold was little changed today at $1,238.32 an ounce after falling 0.4 percent yesterday in a second day of declines. Platinum climbed 0.4 percent and silver snapped a two-day drop to gain 0.2 percent.

To contact the reporters on this story: Emma O'Brien in Wellington at eobrien6@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net

To contact the editor responsible for this story: Emma O'Brien at eobrien6@bloomberg.net

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