Japan Stocks Jump To Lead Asia

Japanese stocks climbed sharply Thursday ahead of a key press briefing by the new central bank governor, though upbeat manufacturing data only briefly supported Hong Kong shares in a mostly higher day for Asia.

Japan’s Nikkei Stock Average  returned from a one-day holiday to climb 1.2%, while Taiwan’s Taiex  advanced 0.5%, and Australia’s S&P/ASX 200 index  rose 0.4%.

Hong Kong’s Hang Seng Index  traded flat, even as the Shanghai Composite Index   rose 0.4% to after Thursday’s release of the preliminary Chinese manufacturing numbers.

South Korea’s Kospi  fell 0.3% in a choppy session.

Setting the stage for gains in Asia, U.S. stocks rose Wednesday after the Federal Reserve wrapped up its monthly policy meeting with an assurance it would continue to support the U.S. economy.

“Investors rediscovered their appetite for riskier assets as concerns about Cyprus began to ease and investors refocused on the improving U.S. economy,” said Perpetual Investments head of investment research Matthew Sherwood.

Crédit Agriciole global markets research chief in Asia, Mitul Kotecha, agreed, saying: “The Fed statement helped markets retain a better mood despite the continued fluidity of the situation in Cyprus.”

Cyprus’ parliament this week rejected a bailout plan reached between the government and the country’s institutional lenders following outrage over plans to tax bank deposits. The country is now back at the negotiating table.

“The fragile situation threatens to dent risk appetite the longer a solution is not found, but for now markets appear to be giving the country and euro-zone officials some leeway, leaving most asset markets in ranges,” Kotecha said.

Meanwhile, the preliminary survey of Chinese manufacturing conducted by HSBC out Thursday drew attention, showing a rise in the index to 51.7 in March, from February’s final reading of 50.4.

“The rebound in the PMI suggests that at least some of the slowing in the pace of growth in February had been attributable to a stronger-than-usual seasonal impact from the [Lunar] New Year holidays, and provides encouraging indications that the economy is not facing a renewed weakening,” said Chris Williamson, chief economist at Markit, which helped compile the HSBC survey.

The data sent benchmark indexes in Hong Kong and Shanghai to modest gains after trading sideways ahead of the numbers, though the Hong Kong index soon drifted back down to the flat-line.

In Hong Kong, shares of Tencent Holdings Ltd.   fell 3.7%, even after it reported a 37% increase in fourth-quarter profit, as the company said it will step up investment in a mobile chatting platform.

Exporters traded broadly higher, however, as Samsonite International SA   surged 5.6%, extending its recent post-earnings gains, while Prada SpA   also jumped 5.6%, and footwear maker Belle International Holdings Ltd.   added 1%.

In Japan, central-bank policy was due to take the spotlight later Thursday, with the new Bank of Japan Gov. Haruhiko Kuroda expected to announce “bold monetary easing, both in terms of quantity and quality” in order to quickly reach the bank’s 2% inflation target, according to a Nikkei news report previewing Kuroda’s press conference.

Signs that the bank would take aggressive policy action have propelled the dollar almost 11% higher against the yen since the start of the year, with the move having a beneficial effect for the exporter-heavy Japanese stock market.

Among exporters extending gains Thursday, Kyocera Corp.  rose 3.2%, Canon Inc.    added 2.6%, Fanuc Corp.   rallied 5.6%, and Hitachi Ltd.   improved by 2.5%.

Financials also traded broadly higher ahead of the Kuroda news briefing, as Daiwa Securities Group Inc.    gained 4.1%, Nomura Holdings Inc.   rose 2.8%, and Mitsubishi UFJ Financial Group Inc.   advanced 1.4%.

Retailers also drew strong interest in Tokyo, as J. Front Retailing Co. rose 2.8% and Seven & I Holdings Co.   gained 4.3%.

Australian shares managed to shake off early losses, even as the market digested the surprise news that Prime Minister Julia Gillard had agreed to call a vote later in the day to determine the leadership of the ruling Labor Party and the nation.

Among the gainers in Sydney, Woodside Petroleum Ltd.   rose 2.1%, and Origin Energy Ltd.   added 1.8% to track gains in crude-oil futures, while Fortescue Metals Group Ltd.   was the outperformer among the major miners, surging 4%.

In South Korea, several major financials traded lower a day after a major cyber-attack hit some of the nation’s top banks and media outlets. Woori Finance Holdings Co.   lost 1.2% Thursday, and Hana Financial Group Inc.  traded 2.8% lower.

Marketwatch

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