Asian Stocks Gain as Oil Surges
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Photo Credit: Afroswede
Asian oil producers and US sales-reliant Japanese companies led the recent Asian stocks advance. This occurred right after prices of crude oil surged to record high in two months while the yen succumbed to the US currency in a three-month low.
Mining company BHP Billiton Ltd. (the world’s biggest), and oil explorer Inpex Holdings Inc. (the largest Japanese oil explorer) gained. JFE Holdings Inc. emerged ahead of all the other steelmakers following the time when Nucor Corp. posted huge second-quarter profit due to increase demand worldwide. Getting approximately 50 percent of its sales from North America, Honda Motor Co., surged in Tokyo on bets that a weaker Japanese currency will boost the sales value in the United States.
Japan, being an export oriented economy, can take advantage of a weaker yen and gain in currency exchange.
The recent gains have indeed helped the benchmark index, which hardly changed through the end of May, get rid of earlier losses to surge 0.1 percent.
“Behind the rising oil price is the resilient global economy, driven by emerging countries. The current exchange rate is weak enough to relieve investors’ concern a stronger yen will erode company earnings,” according to senior strategist Yoshinori Nagano, Daiwa Asset Management Co., Tokyo.
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