Asian Stocks Pare Losses as Weakening Yen Boosts Japan Exporters

Bloomberg, (28/5) -- Asian stocks pared losses, with volatility in Japanese shares reaching the highest in more than two years, as a weakening yen boosted the earnings outlook for exporters.

The MSCI Asia Pacific Index slid 0.1 percent to 136.77 as of 11:05 a.m. in Hong Kong, with about three stocks rising for every two that fell. The gauge retreated the past five days amid speculation the Federal Reserve will reduce its bond purchases as the U.S. economy improves and China manufacturing data missed estimates.

�There are still a lot of international investors that haven�t positioned themselves in Japan,� Adrian Mowat, Hong Kong-based chief Asia and emerging-market strategist at JPMorgan Chase & Co., said in a Bloomberg TV interview with Susan Li. �I would be advising moving into consumer-related stocks. We are going to see on-going earnings revisions. Perhaps this is a sufficient pullback� to buy Japanese shares.

Futures on the Standard & Poor�s 500 Index gained 0.3 percent. Markets in the U.S. and the U.K. will reopen today after a holiday.

Japan�s Topix index and the Nikkei 225 Stock Average swung between gains and losses. The 30-day historic volatility on the Topix climbed to 30.92, the highest since April 2011. A close below 1,148.42 for the Topix would complete a 10 percent decline from a 4 1/2-year high on May 22, the threshold some investors use to define a market correction.

�Market participants aren�t sure about appropriate levels or the outlook of Japanese equities,� said Takahiro Nakano, a Tokyo-based strategist at Mizuho Trust & Banking Co., a unit of Japan�s third-largest bank by market value. �The market is reflecting their mixed views.�

Hong Kong�s Hang Seng Index added 0.1 percent and China�s Shanghai Composite Index fell 0.1 percent. Australia�s S&P/ASX 200 Index advanced 0.2 percent and South Korea�s Kospi index rose 0.3 percent. Singapore�s Straits Times Index climbed 0.2 percent and Taiwan�s Taiex Index was little changed.

A report today probably will show U.S. consumer confidence improved, according to a Bloomberg survey of economists, adding to evidence the world�s biggest economy is recovering.

Chinese Premier Li Keqiang said his country is confronted by �huge challenges� as it opens up the economy and reforms will be accompanied by tapered-off levels of growth.