Asian Stocks Hit Four-Month High

Asian stocks rose to a four-month high on Friday as some investors were inspired by positive U.S. and Japanese economic data to pick out bargains, with the shift to riskier assets weighing on the yen. The yen’s yield disadvantage has also been growing this week, following upside surprises in U.S. and Australian economic figures, handing dealers an incentive to join any selloffs of the Japanese currency.

“The market is on a relief rally as key U.S. data, such as jobs and trade from the U.S., came out better than expected,” said Hong Soon-pyo, an analyst at Daishin Securities in Seoul.

“The data gave the market more assurance about where the global economy is headed,” Hong said.

U.S. stocks posted modest gains on Thursday as recent data eased concerns that the U.S. economy might be sliding back into recession, although sentiment was fragile as investors fretted over the health of European banks. .N

An upward revision to Japan’s second-quarter GDP, though widely expected, added to investor confidence in Asia, market players said.

Also on Friday, China reported stronger-than-expected import growth in August, indicating a possible rebound in domestic demand, and a 34.4 percent rise in exports year-on-year.

The import data reduced the politically sensitive trade surplus ahead of U.S. Congressional hearings next week on whether to punish Beijing for what many in Washington see as an unfairly undervalued yuan.

The Chinese data also bolstered currencies of major commodity exporters such as Australia, helping the Aussie dollar hold near a four-month high of $0.9227.

Still, risk taking has not become overwhelming by any stretch. Economists keep ratcheting down U.S. economic forecasts, corporate executives sound cautious and some of Europe’s banks may need more capital soon.

Tokyo’s Nikkei share average rose 2 percent .N225, with exporter Canon Inc the biggest gainer on the day, up 5.9 percent. The index is on its way to its biggest week increase since the week of July 11.

The MSCI index of Asia Pacific stocks outside Japan rose 0.4 percent .MIAPJ0000PUS to the highest since May 4, with the technology sector leading the pack.

The index is up nearly 11 percent in the quarter, on track for the largest gain since the third quarter of 2009.

The US S&P 500 index overnight .SPX rose 0.5 percent and broke above its 100-day moving average, a medium-term obstacle, revealing its 200-day moving average only 1 percent away as the next significant barrier.