Ben S. Bernanke's Comments make Euro Rises From 8-Year Low

The euro rose from an eight-year low against the yen and commodity producers led Asian stocks higher after Federal Reserve Chairman Ben S. Bernanke said the U.S. economic recovery is intact. Gold traded near a record high.

The MSCI Asia Pacific Index rose 0.4 percent to 110.08 as of 12:25 p.m. in Tokyo. Standard & Poor’s 500 Index futures climbed 0.8 percent after the index declined 1.4 percent yesterday. Japan’s currency weakened to 109.67 per euro after touching 108.08 yesterday, the strongest since November 2001. Copper rose 0.8 percent to $6,150 a metric ton, advancing for the first time in seven days, and gold traded within 1.5 percent of its May 14 record of $1,249.40 an ounce.

The U.S. economic recovery is “moderate-paced,” Bernanke said yesterday, boosting investor confidence after concern over Europe’s debt crisis drove benchmark U.S. stock indexes to seven-month lows. The U.S. has supplanted China and Brazil as the most attractive market, with investors betting money on President Barack Obama’s stewardship of the U.S. economy, according to a global quarterly poll of investors and analysts who are Bloomberg subscribers.

“Bernanke’s comments have had a soothing effect on markets after what’s been a pretty bleak few sessions,” said Tim Waterer, a foreign-exchange dealer with CMC Markets in Sydney. “The mood on Asian equities is a bit calmer and that’s allowed some of the currencies that have been heavily hit, like the euro and Aussie, to eke out gains.”

Nikkei, Kospi Gain

Japan’s Nikkei 225 Stock Average rose 0.4 percent and South Korea’s Kospi gained 1 percent. China’s Shanghai Composite Index added 0.3 percent. Australia’s S&P/ASX 200 Index advanced 1 percent.

Five stocks gained for every three that declined on the MSCI Asia. The measure has slumped 15 percent from its high this year on April 15, dragging the average price of its companies to 14.1 times estimated profit. That’s near the lowest level since January 2009.

A gauge of material producers in the MSCI Asia index climbed 0.7 percent, the most of 10 industry groups, amid speculation global growth will revive metals demand. Rio Tinto Group, the world’s third-largest mining company, gained 1.6 percent to A$66.62 in Sydney. BHP Billiton, the world’s largest mining company, gained 0.8 percent to A$36.82.

Newcrest Mining Ltd., Australia’s largest gold producer, jumped 3 percent after bullion advanced. Softbank Corp., the mobile-phone company with a monopoly on Japanese sales of Apple Inc.’s iPhone, climbed 2.5 percent after the U.S. company unveiled a new model yesterday.

Bernanke ‘Positive’

“Bernanke’s comment is positive for the stock market in that he is saying the economy is improving,” said Yoshinori Nagano, a senior strategist at Tokyo-based Daiwa Asset Management Co., which oversees the equivalent of $94 billion. “I don’t think we have to worry about the U.S. economic recovery. It’s unlikely to go wrong.”

The euro traded at $1.1962 per dollar from $1.1923 in New York yesterday, when it sank as low as $1.1877, the weakest since March 2006.

The Australian dollar rose 1.3 percent to 74.98 yen and the New Zealand currency gained 1 percent to 60.77 yen, ending two days of losses, as Hungary eased concerns it faces a Greece-like debt crisis, reviving demand for higher-yielding assets.

The so-called Aussie strengthened against all of its 16 major counterparts as Hungary’s government pledged to control its budget deficit and make structural changes to overhaul the economy. The New Zealand dollar rallied amid speculation the nation’s central bank will raise interest rates from a record low on June 10.

Hungary ‘Excuse’

“Hungary was obviously used as an excuse,” said Ray Attrill, global research director at Forecast Ltd. in Sydney. “Short-term speculative players are moving quickly” to buy back the Aussie and kiwi. “That’s why we are seeing more volatility,” he said.

Oil for July delivery rose for the first day in three, gaining 0.3 percent to $71.64 a barrel in electronic trading on the New York Mercantile Exchange.

The cost of protecting Japanese and Australian corporate bonds from default fell. The Markit iTraxx Japan index of credit swaps dropped 1 basis point to 149 basis points, according to Morgan Stanley. The Markit iTraxx Australia index fell 1 basis point to 140, according to Nomura Holdings Inc.