Asian Markets Open to the Upside For a Fourth Day Led by Financials and Automakers

Japan will commit to buying subordinated debt

March 18 (Bloomberg) — Asian stocks gained for a fourth day, led by financial companies and automakers, after the Bank of Japan said it may provide subordinated loans to help banks replenish capital and U.S. housing starts increased.

Mizuho Financial Group Inc., which has the most credit- related losses in Asia, jumped 2.5 percent in Tokyo on expectations the central bank will announce more bank support measures at the end of a two-day policy meeting today. Nissan Motor Co. climbed 2 percent in Tokyo on plans to sell debt securities. Woodside Petroleum Ltd. added 1.1 percent in Sydney after crude oil rose to a three-month high.

The MSCI Asia Pacific Index rose 0.5 percent to 77.83 as of 10:40 a.m. in Tokyo, adding to a 7.4 percent advance in the past three days. The gauge is down 14 percent this year, extending last year’s record 43 percent slump as slowing global growth pummeled Asia’s corporate earnings.

“Expectations for additional policies are driving out excessive anxiety about the economy,” Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc., said in an interview with Bloomberg Television.

Japan’s Topix Index rose 0.4 percent, while China’s Shanghai Composite Index gained 0.9 percent. South Korea’s Kospi index lost 0.3 percent and Australia’s S&P/ASX 200 Index dropped 0.1 percent.

Futures on the Standard & Poor’s 500 Index slipped 0.2 percent. The gauge climbed 3.2 percent yesterday on the unexpected rebound in homebuilding and speculation the Federal Reserve will outline plans to bolster the world’s biggest economy.

Housing Starts

Work began on an annualized rate of 583,000 homes in February, the U.S. Commerce Department said yesterday, while economists had predicted a drop to 450,000. That was a 22 percent surge from the previous month, the most since 1990.

Mizuho, which has declared $7.6 billion of credit-related losses, added 2.5 percent to 205 yen in Tokyo. Mitsubishi UFJ Financial Group Ltd., Japan’s biggest publicly traded bank, rose 1.9 percent to 486 yen.

The Bank of Japan said yesterday it may provide as much as 1 trillion yen ($10 billion) in subordinated loans from banks to replenish capital and keep them lending.

The central bank concludes its two-day policy meeting today. Policy makers may announce an increase in the amount of government bonds it buys from lenders as Prime Minister Taro Aso prepares a third stimulus package to ease the nation’s recession, according to economists surveyed by Bloomberg News.

Federal Reserve policy makers may have to ramp up their purchases of mortgage securities and other assets after the economy and job market deteriorated further since they last met, U.S. analysts said.

Oil Gains

The MSCI Asia Pacific Index has rallied 10 percent since March 9, when the gauge dropped to the lowest in more than five years. Analysts’ earnings estimates for companies included in the gauge have declined 65 percent in the past 12 months as the global recession deepened, data compiled by Bloomberg show.

Nissan advanced 2 percent to 365 yen in Tokyo.

The finance unit of Nissan, Japan’s third-largest automaker, plans to sell $1.3 billion in securities backed by auto loans in one of the first debt offerings eligible for a U.S. government program to boost consumer lending. Investors may buy the AAA- rated bonds from Nissan with loans from the Term Asset-Backed Securities Loan Facility.

Woodside Petroleum, Australia’s second-largest oil producer, rose 1.1 percent to A$37.16 in Sydney. Inpex Corp., Japan’s largest oil explorer, added 0.9 percent to 668,000 yen in Tokyo.

Crude-oil futures for April delivery rose $1.81, or 3.8 percent, to $49.16 a barrel on the New York Mercantile Exchange the highest settlement since Dec. 1.