Asian stocks rose this week, with the benchmark index gaining for the first time in a month, on optimism policy makers in the U.S. and China will bolster growth in the world’s two biggest economies. Japanese shares jumped as the yen weakened.
Asian stocks headed for the first weekly gain in a month after Federal Reserve chairman nominee Janet Yellen said she would continue U.S. stimulus and amid optimism China will soon release details of economic reforms.
China’s stocks advanced, capping the benchmark index’s biggest gain in a month, while borrowing costs rose amid speculation the government will unveil detailed changes in economic policy as soon as next week.
Morgan Stanley, previously the most bullish brokerage on Japanese stocks, says the Topix Index will fall about 10 percent as investors await corporate earnings and progress on promised economic reforms.
Investors should start to “scale back” their holdings of emerging-market stocks after a rally lifted valuations and as economic data points to a rising risk of a return to recession, Morgan Stanley said.