Asia Stocks Advance on China Manufacturing, Stronger Dollar

Jan. 4 (Bloomberg) -- Asian stocks rose after Chinese manufacturing expanded in December and a stronger dollar boosted the earnings outlook for Japanese car and electronics manufacturers.

Nippon Yusen K.K., Japan’s biggest shipping line, added 1.4 percent in Tokyo on optimism trade with China will rise. Honda Motor Co., which gets 42 percent of its revenue from North America, gained 1.9 percent. Japan Airlines Corp. soared 31 percent after the government said the Development Bank of Japan will double the amount of credit it will provide for the carrier.

The MSCI Asia Pacific Index rose 0.5 percent to 121.08 as of 10:51 a.m. in Tokyo. The gauge advanced 34 percent last year, the steepest annual climb since 2003 as lower interest rates and stimulus packages helped drag the global economy out of the worst slowdown since World War II.

“Asia is expected to remain the engine of growth for the world’s economy,” said Hiroshi Morikawa, a senior strategist at MU Investments Co., which manages the equivalent of $13 billion in Tokyo. “The first trading day of a year is often seen as a predictor of the year’s market climate. People are hoping this year will be better than last year and become more responsive to good news.”

The Nikkei 225 Stock Average rose 1.3 percent in Tokyo after a four-day recess. Australia’s S&P/ASX 200 Index added 0.2 percent even as a manufacturing index shrank in December for the first time in five months.

Futures on the Standard & Poor’s 500 Index added 0.5 percent. The gauge fell 1 percent on Dec. 31 as falling jobless claims raised speculation the economy was improving enough to allow the central bank to reduce stimulus measures. Government figures showed initial jobless claims in the week ended Dec. 26 fell to the lowest level since July 2008.

Last year’s jump boosted the price-book value ratio of the MSCI Asia Pacific Index to 1.61 times, the highest level since September 2008, data compiled by Bloomberg show.

China’s Purchasing Managers’ Index climbed to a seasonally adjusted 56.6, the Federation of Logistics and Purchasing said on Jan. 1. It was the fastest expansion in 20 months. South Korean exports increased 33.7 percent in December from a year earlier, the fastest pace in 17 months, the Ministry of Knowledge Economy said on Jan. 1. That exceeded the 27.9 percent gain projected by economists.

The yen weakened to as much as 93.15 per dollar on Dec. 31, a level not seen since Sept. 7, and traded at 92.88 today. A weaker yen increases the value of overseas sales at Japanese companies when converted into their home currency.