Asian stocks rose, driving the MSCI Asia Pacific Index to a two-year high, on speculation more central banks will act to spur economic growth after the Bank of Japan cut its benchmark interest rate yesterday. BHP Billiton Ltd., the world’s biggest mining company, advanced 2.4 percent in Sydney after oil and metals prices jumped. Mitsui & Co., which gets most of its profit from commodities, rose 3.3 percent in Tokyo. Mitsubishi Financial Group Inc., Japan’s largest bank by market value, and Mitsui Fudosan Co., the country’s No. 1 property developer by sales, gained more than 2 percent after the Bank of Japan pledged to keep its target rate at “virtually zero” and expand purchases. “Investor sentiment has been buoyed by the surprise decision by the Bank of Japan,” said Tim Schroeders, who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne. “We’re starting to get a second wave of stimulus measures in major economies at a time when investors had previously thought the strength of the global recovery was waning.” The MSCI Asia Pacific Index rose 1.3 percent to 129.51 as of 2:02 p.m. in Tokyo, set for its highest close since August 2008, before the bankruptcy of Lehman Brothers Holdings Inc. The index has climbed 19 percent from this year’s low on May 25, approaching the 20 percent threshold some investors consider as the beginning of a bull market, amid signs a U.S. economic recovery is stabilizing and will support global growth. Japan’s Nikkei 225 Stock Average gained 1.5 percent, adding to yesterday’s 1.5 percent advance after the central bank cut its overnight interest rate to a range of zero to 0.1 percent and said it would set up a fund to buy assets. All Indexes Climb All benchmark indexes in the Asia-Pacific region climbed where trading was open. Hong Kong’s Hang Seng Index, South Korea’s Kospi index, Australia’s S&P/ASX 200 Index all gained more than 1 percent. China’s markets are closed for a holiday. Futures on the Standard & Poor’s 500 Index rose 0.2 percent. The index rallied 2.1 percent yesterday in New York after the Institute for Supply Management’s index of non-manufacturing businesses, which covers about 90 percent of the world’s largest economy, increased to 53.2 in September from 51.5 in August. The median forecast of 76 economists surveyed by Bloomberg News was for a gain to 52. Readings greater than 50 signal growth. Raw-material companies advanced the most among the MSCI Asia Pacific Index’s 10 industry groups on speculation demand for commodities will increase as global economies expand. BHP Billiton increased 2.4 percent to A$40.46 in Sydney and was the biggest contributor to the MSCI Asia Pacific Index’s advance. Rio Tinto Group, the world’s third-largest mining company, advanced 2.2 percent to A$78.72. Commodities Advance Mitsubishi Corp. rose 2.8 percent to 2,032 yen in Tokyo. In Hong Kong, Cnooc Ltd., China’s largest offshore oil producer, climbed 2.3 percent to HK$16.26, while Jiangxi Copper Co., China’s No. 1 producer of the metal, increased as much as 3.6 percent in Hong Kong. Crude oil for November delivery increased 1.7 percent yesterday in New York to $82.82 a barrel. The London Metal Exchange Index of six industrial metals including copper and zinc rose 1.6 percent yesterday to its highest level since July 2008. Gold advanced to a record $1,344.35 an ounce today. The Bank of Japan yesterday cut its benchmark overnight interest rate target to a range of 0 percent to 0.1 percent, the lowest level since 2006, from 0.1 percent. Policy makers will set up a 5 trillion yen ($60 billion) fund to buy assets such as government bonds, commercial paper, exchange-traded funds and real-estate-investment trusts. ‘Monetary Easing Globally’ The package will include about 100 billion yen to help reduce the nation’s reliance on China for rare-earth metals, and 25 billion yen for Japan Oil, Gas and Metals National Corp., Nikkei English News reported today, without citing anyone. “The Bank of Japan’s action may accelerate movements towards monetary easing globally,” said Hiroichi Nishi, general manager of the equities division at Tokyo-based Nikko Cordial Securities Inc. “Confidence grew that the global economy is on a recovery track, and investors will likely put money back into risk assets.” Financial shares had the second-biggest gain on the MSCI Asia Pacific Index of almost 1,000 companies today, led by Japanese real-estate developers, on speculation they may draw investments from the BOJ’s fund. Nomura Real Estate Holdings Inc. surged 8.5 percent to 1,227 yen, the biggest increase on the MSCI Asia Pacific index. Tokyu Land Corp. soared 6.8 percent, the third-steepest gain. Mitsui Fudosan rose 3.5 percent and Mitsubishi Estate Co., Japan’s largest developer by market value, jumped 3.9 percent. Valuations, Japanese Banks The MSCI Asia Pacific Index has risen 7.5 percent this year on speculation growth in profit will weather Europe’s debt crisis, Chinese steps to curb property-price inflation and concern about the pace of the U.S. economic rebound. Stocks in the gauge trade at 14.4 times estimated profit on average, compared with 13.8 times for the S&P 500 and 12 times for the Stoxx Europe 600 Index. Mitsubishi UFJ climbed 2.6 percent and Mizuho Financial Group Inc., Japan’s third-biggest bank by market value, jumped 6.9 percent. They briefly erased gains after a person with direct knowledge of the matter said Japan’s financial regulator is considering forcing the country’s largest banks to hold more capital than required under Basel III rules. NWS Holdings Ltd. soared 8.1 percent to HK$18.08 in Hong Kong. The South China Morning Post said the company hopes to complete at least two acquisitions including a toll road in mainland China, citing Executive Director Tsang Yam-pui. NWS had the second-biggest increase in the MSCI Asia Pacific Index. To contact the reporters for this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net. To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.

Source