Asian currencies strengthened and copper rallied to a record on speculation the global recovery is gathering momentum. Gains in the region’s equity markets were limited by a slump in Japan’s Nikkei 225 Stock Average. The won advanced 1 percent to 1,134.85 per dollar and Australia’s dollar traded near the strongest level since 1982. The yen reached a seven-week high versus the greenback, dragging the Nikkei 225 lower by 1.1 percent on its last trading day of the year. The MSCI Asia-Pacific Index rose 0.3 percent at 5:40 p.m. in Tokyo, set for a 2 ½-year high. The Stoxx Europe 600 Index slid 0.2 percent while Standard & Poor’s 500 Index futures were little changed. Copper gained 1.3 percent in London. Global stocks climbed this year, helping the MSCI World Index recoup its losses following Lehman Brothers Holdings Inc.’s 2008 collapse, amid optimism the global recovery will continue. A Labor Department report today may say U.S. initial jobless claims fell, after data showed South Korean industrial production increased for a 17th straight month and Chinese manufacturing growth slowed, easing concern the government will need to further tighten monetary policy. “Market consensus is the global economy will continue to expand, with the U.S. seeing a recovery and emerging economies continuously growing,” said Takeru Ogihara, chief strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second- largest bank. “That’s a factor to buy growth-related currencies” against the dollar, he said. The won rallied after Bank of Korea official Lee Young Bog forecast the current-account surplus will widen this month, reaching about $29 billion for the year. The surplus narrowed to $1.93 billion in November from $4.89 billion the previous month, while factory output expanded 10.4 percent in November from a year earlier, data released today showed. Aussie’s Rally Australia’s currency was at $1.0176 from $1.0179 yesterday, following an eight-day surge. The currency today reached $1.0198, the highest level since July 1982 before the December 1983 move by the nation to stop pegging the so-called Aussie to a trade- weighted basket of currencies. “There are a lot of real-money managers who are looking to put on long Asian currency positions going into 2011,” said Kurt Magnus, executive director of foreign-exchange sales at Nomura Holdings Inc. in Sydney. “It’s a lot to do with growth. There’s a clear move away from the dollar into Asia.” The yen climbed to 81.48 per dollar from 81.62 and earlier touched 81.29, the strongest since Nov. 9. Japan’s currency has strengthened 14.1 percent this year, the best performance among its major peers versus the greenback. Exporters fell, with Honda Motor Co. losing 1.2 percent and Nintendo Co. dropping 2.4 percent. Annual Gains Markets will be shut tomorrow for holidays in Japan, South Korea, Indonesia, the Philippines, Malaysia and Thailand. The MSCI Asian index has rallied 14 percent this year, while the MSCI World, a measure of 1,660 developed-nation stocks, has advanced 9.7 percent. Dongbu Insurance Co. jumped 6.8 percent for the second- biggest percentage advance on the Asian stocks gauge after the South Korean government announced measures to help non-life insurers stem losses at their auto insurance businesses. China’s Shanghai Composite Index gained 0.3 percent, erasing losses of as much as 1 percent. A manufacturing index released by HSBC Holdings Plc and Markit Economics fell to 54.4 in December from a previously announced 55.3 in November, slowing for the first time in five months. China Rebound Chinese stocks, the worst-performing equities market among major developing countries this year, are poised to rebound in 2011 as the government keeps inflation under control, said Mark Mobius, who oversees about $40 billion as executive chairman of Templeton Emerging Markets Group. “The manufacturing data today may at first be seen as bearish, however given the biggest risk to the market has always been a slowdown in China due to tightening measures, investors are taking it as a bullish signal instead,” Wang Pengzhen, an analyst at Zhongda Futures Co., said from Zhejiang. “The data gave investors optimism that the government may ease up on its tightening policy.” Copper gained as much as 1.6 percent to $9,550 a metric ton in London, taking its rally this year to 29 percent. The metal rose 1.3 percent to $4.3665 a pound on the Comex in New York and earlier reached $4.3790, also a record. Crude oil for February delivery advanced 0.2 percent to $91.26 a barrel on the New York Mercantile Exchange after falling yesterday from a 26-month high. An Energy Department report today may show a 2.85 million-barrel decrease in U.S. crude stockpiles, according to the median projection of 14 analysts in a Bloomberg News survey. To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net To contact the editor responsible for this story: Will McSheehy at wmcsheehy@bloomberg.net

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