Toyota, Honda Advance on Weaker Yen

Asian stocks rose for a second day as the Nikkei 225 Stock Average posted its biggest back-to-back gains this year.

Toyota Motor Corp. and Honda Motor Co. advanced after the yen extended a decline, boosting the value of their overseas sales. Mitsubishi UFJ Financial Group Inc. led Japan's largest banks higher after Standard & Poor's said it may raise their credit ratings.

``We will hold our view that the yen may fall further,'' said Masaru Hamasaki, senior strategist at Toyota Asset Management Co., which oversees $3.3 billion in Tokyo. ``S&P's call eased concern among investors who had doubted that banks' profitability would really improve.''

AU Optronics Corp. and Chi Mei Optoelectronics Corp. paced gains among liquid-crystal display makers after a newspaper report said the companies received orders for television panels from South Korea. LG.Philips LCD Co. climbed after Macquarie Securities Ltd. and UBS AG raised their price targets.

The Morgan Stanley Capital International Asia-Pacific Index rose 0.5 percent to 143.04 as of 2:36 p.m. in Tokyo. The Nikkei 225 gained 1.1 percent to 17,187.91, after climbing 1.6 percent yesterday. All markets open for trading advanced, except in New Zealand. South Korea, Taiwan, the Philippines, Indonesia and China were little changed.

PetroChina Co. dropped after full-year profit rose at the slowest pace since 2002. Posco led steelmakers lower after steel prices slid in China, the world's biggest user of the alloy.

Weaker Yen

Toyota, the world's second-largest automaker, rose 1.4 percent to 7,780 yen. Honda Motor Co., Japan's No. 2 automaker, added 1.2 percent to 4,180 yen. Advantest Corp., the biggest maker of memory-chip testing equipment in the world, climbed 1.1 percent to 5,430 yen. Sharp Corp., the No. 1 maker of LCD televisions, rose 2 percent to 2,275 yen.

The yen weakened to as low as 117.76 per dollar in New York, down from as high as 116.25 in Tokyo yesterday. The Japanese currency fell to 156.33 against the euro from as high as 154.78 in Tokyo.

A weaker yen means Japanese exporters get more for their overseas sales when they are converted back to local currency while their products become more competitive.

Overseas sales accounted for 63 percent of Toyota's revenue in the last financial year. Honda had 55 percent of its sales in North America in the year to March 31. Advantest made more than half of its sales outside Japan.

Higher Ratings?

Mitsubishi UFJ, Japan's biggest lender by assets, jumped 3.1 percent to 1.33 million yen. Sumitomo Mitsui Financial Group Inc., the third largest, rose 1.9 percent to 1.07 million yen.

Standard & Poor's yesterday put its long-term counterparty ratings on Japan's three major bank holding companies and their operating entities, and five independent banks on CreditWatch with positive implications.

``The fundamental strength of the banks will continue to improve,'' Ryoji Yoshizawa, a credit analyst at S&P, was cited as saying in the report. ``With Japan's economy growing steadily, the banks are seeing solid business performance.''

Japanese lenders also advanced on speculation mergers and acquisitions in the country's financial industry will pick up after Barclays Plc, the third-largest U.K. bank, said it's in talks to buy ABN Amro Holding NV, the biggest Dutch bank. Global mergers and acquisitions will stimulate alliances in the local financial market, Tsutomu Fujita and Patrick Mohr, strategists at Nikko Citigroup Ltd., wrote in a note dated yesterday.

LCD Makers

AU Optronics, the world's third-largest LCD maker, rose 0.6 percent, to NT$48.40. Chi Mei, Taiwan's second-biggest maker of flat-panel displays, jumped 3.1 percent to NT$34.80.

AU won orders to supply 46-inch LCDs to Samsung Electronics Co., the Economic Daily News reported, without citing anyone. Shipments of the television panels will start in the second half of this year, the newspaper reported.

Chi Mei has received orders from LG.Philips for 47-inch flat-panel screens, the report said. Lehman Brothers yesterday recommended investors accumulate shares Chi Mei and AU Optronics.

LG.Philips, the world's second-largest LCD maker, climbed 3.5 percent to 35,150 won. Michael Bang, an analyst at Macquarie Securities Ltd., raised his recommendation for the stock to ``outperform'' from ``neutral,'' citing a ``better pricing outlook'' and ``better industry dynamics.'' The brokerage raised its 12-month stock price estimate 31 percent to 38,000 won in a report dated today.

UBS raised its 12-month price target on LG.Philips by 19 percent to 35,000 won, citing expectations the industry will recover from the second half, according to a March 19 report.

PetroChina

PetroChina, fell 1.5 percent to HK$8.60 in Hong Kong. Net income rose 6.6 percent to 142.2 billion yuan ($18.4 billion) last year, less than the median 149.8 billion yuan forecast by analysts in a Bloomberg survey.

The earnings are ``disappointing'' and ``below expectations,'' David Johnson, a Hong Kong-based analyst at Macquarie Securities Ltd., said in a research note today. He cut his rating on the stock to ``neutral'' from ``outperform.''

Posco, the world's third-biggest steelmaker, slid 2.4 percent to 370,500 won. Average prices of hot-rolled coil in China fell 2 percent to 4,213 yuan per metric ton ($544) yesterday from 4,295 yuan earlier this month, according to data from Beijing Antaike Information Co.

``There's talk that Chinese steel prices have hit the ceiling after seeing some abnormally high levels,'' said Choi Chang Hoon, who manages about $500 million at Woori Credit Suisse Asset Management Co. in Seoul. ``Posco's contracts with their buyers are based on global steel prices.''

Sumitomo Metal Industries Ltd., Japan's third-largest steelmaker, slid 0.7 percent to 578 yen. Angang Steel Co., the biggest Chinese steelmaker that's listed in Hong Kong, declined 0.6 percent to HK$12.50. Baoshan Iron & Steel Co., China's biggest steelmaker, lost 0.9 percent to 8.85 yuan.

source:www.bloomberg.com