Asian Stocks Post Biggest Weekly Gain Since 2007 on Fed Plans

March 21 (Bloomberg) -- Asian stocks posted their biggest weekly rally since August 2007 as the U.S. and Japan stepped up measures to ease the financial crisis and revive economic growth.

Mitsubishi UFJ Financial Group Ltd., Japan’s biggest bank, jumped 17 percent in Tokyo after the Federal Reserve joined the Bank of Japan in buying government debt. Commonwealth Bank of Australia, the nation’s largest mortgage lender, rose 12 percent in Sydney after the Reserve Bank of Australia said it has scope to further cut rates. PetroChina Ltd., the nation’s biggest oil producer, rose 4 percent as crude rose to a three-month high.

“The liquidity injections from the Fed and the Bank of Japan have boosted sentiment in the market,” said Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank, which manages $27 billion of Asian assets. “People may start to take profit on this bear-market rally. We’re still a long way from the end of this crisis.”

The MSCI Asia Pacific Index rose 6.4 percent to 79.53 this week, adding to last week’s 3.9 percent advance. Japan’s Nikkei 225 Stock Average climbed 5 percent in a holiday-shortened week. Hong Kong’s Hang Seng Index rose 2.5 percent. South Korea’s Kospi Index jumped 4 percent.

Standard Chartered Plc, the U.K.’s second-largest bank by market value, gained 11 percent in Hong Kong after saying it does not need to raise capital. China Huiyuan Juice Group Ltd. plunged 58 percent in Hong Kong after Chinese regulators blocked Coca-Cola Co.’s $2.3 billion takeover bid. Casio Computer Co., the maker of G-Shock watches and Exilim cameras, tumbled 17 percent in Tokyo as it forecast its first loss in seven years.

Concerted Action

Governments from the U.S. to China and Japan are widening measures to ease the financial crisis, which has caused more than $1 trillion of losses worldwide, and avert what the World Bank predicts will be the first global economic contraction since World War II.

The Fed said on March 18 it will purchase $300 billion in Treasury securities and an additional $750 billion of mortgage securities. The Fed will use newly created money to fund the purchases, increasing the supply of funds in the market and helping to drive down rates.

That follows a Bank of Japan move to increase its monthly purchases of government debt from bank 1.8 trillion yen ($18.3 billion) from 1.4 trillion currently. The central bank also said this week it may provide as much as 1 trillion yen in subordinated loans to banks.

“It’s positive that governments are making concerted efforts to revive the economy but it will take some time before consumers become comfortable spending again,” said Yoji Takeda who manages about $1.1 billion at RBC Investment (Asia) Ltd. in Hong Kong. “It’s hard to be 100 percent bullish on equities.”

Good Start

Mitsubishi UFJ gained 17 percent to 489 yen in Tokyo. Mizuho Financial Group Inc., Japan’s second-largest bank, jumped 17 percent to 209 yen. Standard Chartered gained 11 percent to HK$99.15 in Hong Kong as it joined global banks including Citigroup Inc. and JPMorgan Chase & Co. in saying they had a good start for the year.

Commonwealth Bank of Australia climbed 12 percent to A$34. Macquarie Group Ltd., the nation’s biggest investment bank, soared 20 percent to A$23.50. The country has more scope than most others to respond to the worsening slump in the global economy, Malcolm Edey, assistant governor of the Reserve Bank of Australia, said on March 19.

PetroChina gained 4 percent to HK$5.98 in Hong Kong, adding to last week’s 12 percent jump, as crude prices surged 10.4 percent to $51.06 a barrel, the highest since Nov. 28. Cnooc Ltd., China’s largest offshore oil producer, jumped 5.8 percent to HK$7.53.

Huiyuan, China’s biggest domestic juicemaker, plummeted 58 percent to HK$4.33. The Ministry of Commerce said Coca-Cola’s proposed takeover would have been “negative for competition.”

Casio tumbled 17 percent to 640 yen. The company predicted a net loss of 23 billion yen in the year to March 31, compared with its forecast last month for profit of 1.5 billion yen.