Asia Stocks Stage Christmas Rally

Strong gains surfaced in the few Asian stock markets open Tuesday for Christmas, with Tokyo jumping on a weakened yen, and Shanghai rallying on a sharp advance for realtors and banks.

Japan’s Nikkei Stock Average  climbed 1.4% as investors returned from a three-day weekend for the Emperor’s Birthday, while Taiwan’s Taiex  advanced 1.3%.

The Shanghai Composite Index  opened lower but quickly shot upward to end the day with a 2.5% gain, returning to positive territory for the year for the first time since mid summer.

Most other major Asian markets were shut for the holiday, including those in Australia, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and South Korea. The majority were due to reopen Wednesday, while Sydney and Hong Kong were slated to close until Thursday.

Japan’s sharp rally came as investors celebrated the yen’s move to a 20-month low against the dollar by snapping up exporter shares.

Amid vows from Japan’s new government to push its currency lower, the U.S. dollar   rose to just shy of 85 yen ahead of the open, its highest level since April 2011.

Over the past couple of months, the dollar has moved off recent late-summer lows in the upper ¥70s but remains weak historically.

Before the 2008 financial crisis, for instance, the U.S. currency rarely traded below ¥100. And earlier times saw a significantly weaker yen, with the dollar trading above ¥200 until the mid 1980s.

The recent losses for the yen come as Shinzo Abe — the former Japanese prime minister who is returning to power after a win for his party in this month’s general election — has demanded central-bank action to weaken the currency and protect the nation’s exporters.

On Sunday, Abe called on the Bank of Japan to resist what he said were attempts by the U.S. and Europe to cheapen their currencies, according to a Wall Street Journal report. Read: Dollar up vs. Japan’s yen after Abe comments

While the dollar had moved off its intraday high against the yen by the end of Tokyo’s Tuesday session, trading at ¥84.78, many Japanese exporters nonetheless rallied.

Nikon Corp.   rose 2.3%, Olympus Corp.   jumped 3.7%, Advantest Corp.    added 3.6%, Subaru maker Fuji Heavy Industries Ltd.   soared 4.5%, and industrial major Kawasaki Heavy Industries Ltd.   gained 2.4%.

Interest in Japanese stocks was strong among offshore buyers, according to a Dow Jones Newswires report.

The report quoted Monex market analyst Toshiyuki Kanayama as saying that “despite the Christmas holiday season, volume figures indicate that foreign investors remain in the hunt for Japan shares.”

Kanayama cited Nomura Holdings Inc.    — which closed 6.3% higher Tuesday — as among the names attracting foreign buying.

Also in Tokyo, shares of Kobe Steel Ltd.  underperformed to end flat as a Nikkei news report said it was ditching plans to build an aluminum plant in China’s Inner Mongolia region due to concerns about the Chinese market.

Mitsubishi Chemical Holdings Corp.   rose 1.7% after a separate Nikkei report said the company plans to buy pharmaceutical-capsule maker Qualicaps Co. from U.S. investment fund Carlyle Group.

On the downside, shares of Sharp Corp.    tumbled 7.5%, extending their decline in recent sessions.

Real estate boosts Shanghai

Over in China, stocks came off their opening losses, with the Shanghai Composite lifting back above the psychologically important 2,200 level, where it had begun the year.

Property shares helped lead Shanghai’s bull run after Chinese real-estate website Soufun reported Monday a 27% jump in new home sales in Shanghai over the course of the previous week, though the average price slipped 1.9%.

A report in People’s Daily Online cited Soufun Shanghai analyst Tang Zhengwei as saying residential sales this month would likely set the 2012 record.

Among China’s top property firms, Gemdale Corp. surged 5.6%, and Poly Real Estate Group Co. Ltd.  jumped 4.7%, while on the Shenzhen bourse, China Vanke Co.   closed with a 6% gain after opening lower.

Banks also enjoyed heavy gains for their shares, as China Construction Bank Corp.   rose 3.6%, China Merchants Bank Co.    improved by 4.2%, and China Minsheng Banking Corp.   rocketed up 4.7%, with market reports from the region attributing the advance to growing optimism over the Chinese economy.

Marketwatch