By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Japanese stocks shot higher Friday,
outrunning other Asian markets by a wide margin, as an overnight
advance on Wall Street and a weakened yen combined with upbeat
industrial-production data to lift sentiment.
The Nikkei Stock Average rose 3.5% during the session, further
stretching its 3% rally the previous day. The performance helped
the benchmark pare its monthly loss in June to 0.7%. In the first
half of 2013, however, the Nikkei still remains the best performer
among regional benchmarks with a gain of 31.6%.
The broader Topix improved by 3.2%, as the U.S. dollar (USDJPY)
jumped briefly rise above the Yen99-handle, with analysts eyeing
further weakness for Japan's currency.
A third straight day of gains for the Dow Jones Industrial
Average (DJI) on Thursday, amid fading fears the Federal Reserve
would cut its bond purchases, set the tone for a further advance in
Asian markets Friday.
"Yen volatility has been hard to handle, but after a big
washout, a clearer signal from the [U.S. Federal Reserve] and
evidence of declining volatility, there is a [case] for fresh short
positions," said Nomura strategist Jens Nordvig.
Data released Friday painted a mostly strong picture of economic
conditions in Japan, providing a further lift. Industrial output
for May saw a particularly robust gain, rising 2% to trounce
expectations for a 0.2% improvement.
Shares of Sumitomo Mitsui Trust Holdings Inc. (SMFJY) soared
8.2%, Sharp Corp. (SHCAY) rose 8.1%, Mitsubishi Estate Co. (MITEY)
climbed 6.7%, Fast Retailing Co. (FRCOY) added 6.2% and Mazda Motor
Co. (MZDAY) rose 4.6% in a rally that touched most sectors.
Shares of Renesas Electronics Corp. (RNECY) added 3.4%, after
the chip maker said late Thursday it would withdraw from most of
its loss-making mobile operations, according to Kyodo News.
Most other Asian stocks rise
Elsewhere in Asia, South Korea's Kospi climbed 1.6% after
jumping 2.9% the previous day, Hong Kong's Hang Seng Index added
1.8%, and Australia's S&P/ASX 200 slipped 0.2%.
China's Shanghai Composite jumped 1.5% for its first higher
finish in eight trading days. The index, however, ended June with a
hefty loss of 14%, amid worries about the recent rise in interbank
money market rates and on slowing momentum in the wider
economy.
"China's interbank liquidity was severely squeezed in teh past
few weeks. ... We believe it is time for markets to calm down now
and that the worst is probably behind us," said Ting Lu, China
economist at Bank of America Merrill Lynch.
Stock gains in Shanghai were aided by a further rebound in most
banks from heavy recent losses, with property firms also
rising.
China Minsheng Banking Corp. (CMAKY) climbed 4.4%, paring the
loss so far this week to 9.3%, while Bank of Communications Co.
(BCMXY) rose 1.8%, narrowing its weekly drop to 4%.
In Hong Kong, gains were spread wider, with China Life Insurance
Co. (LFC) rising 2.5%, China Overseas Land & Investment Ltd.
(CAOVY) gaining 4.6%, and personal-products maker Hengan
International Group Ltd. advancing 7.2%.
In Seoul, auto makers and financial stocks advanced, with
Hyundai Motor Co. (HYMTF) gaining 3.4%, and Shinhan Financial Group
Co. (SHG) rising 1.5%.
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