Asian Stocks Rise, Heading to Third Weekly Gain; Honda Advances

March 12 (Bloomberg) -- Asian stocks rose, sending the MSCI Asia Pacific to its third weekly advance, as the yen weakened on speculation Japan’s central bank will loosen monetary policies.

Honda Motor Co., a carmaker that gets about 45 percent of sales in North America, and Nissan Motor Co., which gets about 77 percent of its revenue outside Japan, climbed more than 1 percent in Tokyo. Hitachi Ltd. gained 1.5 percent after its incoming president said the unprofitable manufacturer’s performance will improve next fiscal year.

The Bank of Japan may seek to expand a 10 trillion-yen ($110 billion) fund that provides loans to banks in a March 16- 17 policy meeting, according to two central bank officials who spoke on condition of anonymity.

“The BOJ is increasingly seen as determined to beat deflation, and that’s propping up investor sentiment,” said Kenichi Hirano, general manager and strategist at Tokyo-based Tachibana Securities Co. “Further monetary easing will widen a gap in borrowing costs between Japan and other countries, which may lead to the yen’s depreciation.”

The MSCI Asia Pacific Index rose 0.3 percent to 123.16 as of 9:30 a.m. in Tokyo, with twice as many shares advancing as declining.

The gauge has gained about 2.4 percent this week, set for a third weekly advance, as a lower-than-estimated U.S. unemployment rate boosted investor confidence in a U.S. economic recovery. Shares in the gauge trade at 19 times estimated earnings, compared with 15 times for the Standard & Poor’s 500 Index in the U.S. and 13 times for the Stoxx Europe 600 Index.

Nikkei Advances

Japan’s Nikkei 225 Stock Average climbed 0.8 percent to 10,748.45, the biggest advance among major Asia-Pacific benchmark indexes. Australia’s S&P/ASX 200 Index rose 0.4 percent. South Korea’s Kospi Index increased 0.5 percent.

Futures on the Standard & Poor’s 500 Index fell less than 0.1 percent. The gauge gained 0.4 percent yesterday in New York to the highest level since October 2008, as Citigroup Inc. led a bank rally and investors speculated that health-care reform will be harder to pass.

The yen depreciated to 124.15 against the euro today from 123.31 at the 3 p.m. close of stock trading in Tokyo yesterday, and weakened to 90.75 versus the dollar today from 90.38. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.