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Asia: Stocks rise on China data as Japan shares swing after BOJ

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[SYDNEY] Asian stocks rose for a second day after gauges of manufacturing in China topped estimates, while the Topix index fluctuated as the Bank of Japan maintained its monetary stimulus. Australian equities held declines after the central bank kept interest rates unchanged.

The MSCI Asia Pacific Index added 0.3 per cent to 139.42 as of 12:51pm in Tokyo. A government and a private gauge of China manufacturing indicated a stabilisation in Asia's largest economy. 

The BOJ kept its monetary policy stance unchanged even as it trimmed its forecast for inflation for the coming fiscal year to 1.5 per cent from 1.7 per cent. The Reserve Bank of Australia left the cash rate at 1.5 per cent Tuesday.

China's official factory gauge rose to the highest since July 2014 in October, suggesting the economy maintained a steady expansion into the fourth quarter as robust consumption underpins demand.

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Market voices on:

"This will improve market sentiment," said Margaret Yang, a Singapore-based analyst at CMC Markets Singapore. The data "indicates the economy has swung back into expansionary territory for a third consecutive month and shows further stabilisation of Asia's largest economy."

Central bank decisions, including from the Federal Reserve this week, and next week's US presidential election are some of the major events investors need to grapple with in addition to a raft of company earnings results due Tuesday in Japan, including Sharp Corp and Yahoo Japan Corp.

Odds of an interest-rate hike in the US this week are well below 20 per cent, while traders now see a 71 per cent probability of an increase next month, though an indecisive US vote or further appreciation in the US dollar might jeopardise such a move.

Hong Kong's Hang Seng Index rose 1.3 per cent and the Hang Seng China Enterprises Index for mainland Chinese companies listed in Hong Kong jumped 1.9 per cent. The Shanghai Composite Index gained 0.2 per cent.

Japan Rebounds

Japan's Topix index slipped 0.1 per cent, erasing an earlier advance of 0.1 per cent. The measure posted a 5.3 per cent gain in October, the best month since July, as the yen slid against the US dollar. A weaker currency has fanned bets exporters' profits may not be as bad as previously expected for the year.

Australia's S&P/ASX 200 Index slipped 0.7 per cent with trading volume down about 25 per cent on its 30-day average. Melbourne residents are enjoying a public holiday and Sydney traders' eyes will be glued to TVs in bars across the city to watch the Melbourne Cup horse race.

South Korea's Kospi index was little changed, New Zealand's S&P/NZX 50 Index was down 0.7 per cent. Markets in the Philippines remain closed for a holiday.

Honda Earnings

Among the 235 Japanese companies that reported earnings Monday, Honda Motor Co raised its forecast for full-year profit as demand for the Vezel and XR-V sport utility vehicle models surged in China, the carmaker's second-largest market.

Sony Corp cut its earnings forecast by 10 per cent after taking an impairment on the sale of its battery unit in the latest move by the consumer electronics giant to focus on its most lucrative businesses.

Japan Tobacco Inc lifted its full-year profit estimate for the second time this year on better than expected performance at its overseas and pharmaceuticals businesses.

E-mini futures on the S&P 500 index gained 0.4 per cent after the underlying gauge of US shares closed little changed on Monday.

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