Asian Stocks: Japan Rises, Led by Toyota, Banks; Korea Declines
By Tomoko Yamazaki
Tokyo, March 21 (Bloomberg) -- Japanese stocks rose, led by Toyota Motor Corp. and other automakers, as the yen's plunge to a 22-month low will boost their repatriated overseas profit.
Banks including Mizuho Holdings Inc. paced gains after the Bank of Japan on Monday said it will push interest rates close to zero and urged government policymakers to do their share to stop the economy from sinking into recession. The Nikkei 225 stock average rose 134.49, or 1.1 percent, to 12,325.46. The broader Topix index gained 1.2 percent to 1213.55.
``Investors have been favoring auto stocks in recent weeks as the yen's been weakening,'' said Clive Wiggins, an auto analyst at Commerz Securities (Japan) Co. ``Between the auto sector and the tech-related sector, investors favor the auto sector as the tech-related sector tends to get hurt more by the U.S. market and the U.S. economy.''
Concerns that the U.S. Federal Reserve's half-point interest rate cut won't be sufficient to turn around the global economy sent other markets lower. Korea's Kospi fell 1.3 percent, led by Samsung Electronics Co. and computer-related exporters. Australia's S&P/ASX 200 Index fell 0.7 percent, led by News Corp. New Zealand's Top 40 index fell 1.1 percent, led by Telecom Corp.
In Japan, Toyota Motor, which has U.S. sales making up more than a third of its total revenue rose 3 percent to 4490 yen, extending its three-day 9 percent gain. Each 1 yen decline in value against the dollar adds 10 billion yen to operating profits at Toyota Motor, analysts said.
The yen has weakened 8.9 percent in the past three months.
Nissan Motor Co., Japan's third-largest automaker, rose 2.8 percent to 843 yen.
Mizuho Holdings, the world's largest bank by assets, rose 3.4 percent to 648,000 yen, after the central bank cut its key interbank lending rates 10 basis points to 0.15 percent on Monday.
Sakura Bank Ltd., which is merging with Sumitomo Bank Ltd. to form the world's No. 2 lender, jumped 6.7 percent to 609 yen.
Korea
Korea's Kospi lost 6.74 to 524.85. The U.S. is Korea's largest trading partner, accounting for a fifth of total exports. Samsung Electronics, the world's biggest computer-memory- chipmaker, fell 1.6 percent to 188,000 won. Hyundai Electronics Industries Co., the world's second largest, shed 2.4 percent to 3010 won.
Some investors had been hoping for a bigger reduction in U.S. rates to stem the economic slowdown.
``The higher the expectations are, the more disappointed investors are,'' said Woo Min Ki, a strategist at Shin Young Securities Co. in Seoul. ``They were expecting as much as a 75 basis point cut.''
Extending the index' losses, brokerage shares fell on concern the Fed's interest rate cut won't be enough to prevent further declines in the stock market and boost the appeal of equity investments. Samsung Securities Co., Korea's largest brokerage, lost 1.8 percent to 29,700 won. Hyundai Securities Co., the nation's second-largest brokerage, shed 4.7 percent to 5700 won.
Australia
Australia's S&P/ASX 200 Index fell 23.20 to 3205.50. News Corp. lost 3.5 percent to A$15.81, after earlier falling to its lowest since Jan. 11. The world's fifth-largest media company derives about three quarters of its sales from the U.S.
``There's a notion that growth will take longer to recover in the U.S.,'' said Hans Kunnen, who helps manage $9 billion in Australian equities at Colonial First State Investments in Sydney. ``The wording of the Fed's press release indicated the extent of the weakness and that may not have been factored into earnings expectations.''
Among other decliners, BHP Ltd. fell 1.2 percent to A$20.08, extending yesterday's 5.1 percent slump from a record high. The Financial Times reported on its Web site, citing people close to the negotiations, that Alcan Inc., the second- biggest aluminum maker, is considering making a rival offer for Billiton Plc. after BHP Monday agreed to acquire Billiton.
Commonwealth Bank of Australia led the decline in banks after Australia's antitrust regulator asked the central bank to set fees and membership rules for the country's credit-card system, saying banks' card network fees are 39 percent higher than the cost of providing the service and generate more than A$1 billion of revenue for the nation's banks.
Commonwealth Bank fell 1.5 percent to A$29.20 and NAB declined 1.1 percent to A$28.30.
``Banks have peaked out in the short term,'' said Eric Betts, an investment strategist at Nomura Australia Ltd.
New Zealand
New Zealand's Top 40 Index fell 22.30 to 2094.22. Telecom, which accounts for about a quarter of the key stock index, fell 3 percent to NZ$6.08, after yesterday rising 4 percent. The nation's dominant company fell as a 3.7 percent drop in the U.S. S&P Telephone Index lowered the valuation for telecommunication companies worldwide.
The Fed's 50 basis point rate cut sustained concern an erosion in profit growth won't end yet.
``The market is a touch impatient,'' said Colonial First State's Kunnen. ``Investors had built in larger rate cuts but even those won't turn earnings around in an instant.''
Warehouse Group Ltd. rose 2.1 percent to NZ$6.25, extending yesterday's 2.9 percent gain. New Zealand's largest retailer has been raising prices the past five weeks to recover import costs that rose because of the weaker New Zealand dollar, the Dominion newspaper reported.
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