Asian stocks rose as Tokyo shares rallied for a third day and Group of 20 leaders pledged to use fiscal policy to strengthen growth and job creation.
The MSCI Asia Pacific Index gained 0.4 percent to 120.08 as of 9:09 a.m. in Tokyo. Investors are looking for clues as to the strength of the global economy after finance chiefs from the world’s top economies committed their governments over the weekend to doing more to boost global growth amid mounting concerns over the potency of monetary policy. Japan’s most recent round of monetary easing was a focus of the meeting, amid concern it could spur a round of competitive currency devaluations, said Eurogroup chief Jeroen Dijsselbloem.
“Everyone’s focused on those G-20 comments and a lot of that was aimed at Japan,” Chris Weston, Melbourne-based chief market strategist at IG Ltd., told Bloomberg TV. “There’s very little the Bank of Japan can do now to try and promote inflation expectations. They are not going to intervene in the currency market -- that’s pretty clear now. They would get the wrath of the world on their back if they decide to do so. It’s not really going their way and there’s not really a lot they can do.”
The G-20 members reaffirmed they will refrain from competitive devaluations, and -- in new language -- agreed to consult closely on currencies. Chinese manufacturing data due Tuesday and the monthly U.S. jobs report Friday are just two of a string of closely watched economic data points scheduled to be released this week.
Asia’s benchmark index is down 9 percent in 2016, compared with a 4.7 percent slide in the S&P 500. Slumping commodities prices, a surprise devaluation of the yuan and a move into negative rates from the BOJ roiled equity markets at a time the Federal Reserve is considering how fast it can lift U.S. interest rates without choking off the economic recovery.
Japan’s Topix index advanced 1.1 percent. The yen traded at 113.71 per dollar after falling 0.9 percent Friday. South Korea’s Kospi index rose 0.1 percent and Australia’s S&P/ASX 200 Index added 0.5 percent. New Zealand’s S&P/NZX 50 Index climbed 0.3 percent. Taiwan is closed for a holiday.
Futures on Hong Kong’s Hang Seng Index rose 0.1 percent, while contracts on the Hang Seng China Enterprises Index of mainland firms listed in the city fell 0.1 percent. Futures on the FTSE China A50 Index added 0.1 percent. Earnings Monday are due from firms including China Everbright International Ltd., a developer of water and environmental protection projects.
Futures on the Standard & Poor’s 500 Index were little changed. The S&P 500 fell 0.2 percent Friday in New York, after rising as much as 0.6 percent. Higher growth and inflation readings helped spur a stronger dollar, sending some companies with significant overseas business lower.
To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net Tom Redmond
