HONG KONG (MarketWatch) — Japanese stocks led a broad rally in Asia on Monday, with exporters riding further higher as the yen caught a fresh tailwind on hopes a possible change of government will push greater monetary easing.
The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.79% rallied 1.4% to clinch gains for a fourth consecutive trading day. Major exporters again led the rally Monday as the dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.2187% briefly touched a seven-month high. The euro /zigman2/quotes/210561215/realtime/sampled EURJPY +0.1634% closed in on the ¥104 mark.
The yen’s drop came amid expectations that elections slated for December will return opposition leader Shinzo Abe as Japan’s next prime minister. Abe has strongly supported more monetary easing measures, suggesting Saturday he may seek to have the central bank underwrite Japanese infrastructure bonds. Read full story on Abe’s remarks and their significance.
“Pressure on the country’s central bank has been building for quite some time, and it looks at last to have reached critical mass,” said Frederic Neumann, co-head of Asian economics at HSBC. “All the extra liquidity will likely will likely spill out of the country and add further froth to markets across the region.” Read: Bank of Japan under watch for easing clues.
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Toyota Motor Corp. /zigman2/quotes/203803129/delayed JP:7203 -0.38% /zigman2/quotes/200537742/composite TM -0.34% advanced 1.4%, Hitachi Ltd. /zigman2/quotes/203839937/delayed JP:6501 -0.42% /zigman2/quotes/203416411/delayed HTHIF +2.28% added 2.8%, and Canon Inc. /zigman2/quotes/207639533/delayed JP:7751 +3.58% /zigman2/quotes/210242912/composite CAJ +3.08% jumped 4.5%.
Honda Motor Co. /zigman2/quotes/200490352/delayed JP:7267 +0.36% /zigman2/quotes/207173990/composite HMC -0.69% rose 0.4% after a Nikkei business news report Saturday that the firm had raised its Japan sales target by 16% for the fiscal year ending in March.
Meanwhile, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.28% improved by 0.9%, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.73% advanced 0.5%, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -2.31% climbed a modest 0.6% and China’s Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -0.33% inched up 0.1%.
On the downside, Taiwan’s Taiex ended fractionally lower after a choppy trading session.
Airline shares were among outperformers in Sydney, with Qantas Airways Ltd. /zigman2/quotes/205534063/delayed AU:QAN -3.05% /zigman2/quotes/200387630/delayed QUBSF -2.80% rising 1.6%, extending gains following the announcement last week of a fresh stock buy-back plan. Qantas rival Virgin Australia Holdings Ltd. /zigman2/quotes/207744791/delayed AU:VAH +4.17% /zigman2/quotes/207088423/delayed VBHLF 0.00% rose 2.1%.
Shares of Billabong International Ltd. soared 10.1% after the surfwear maker said the head of its U.S. division was considering a buyout of the company. Read: Billabong director mulls buyout of company.
/zigman2/quotes/210598030/delayed HSI 26,696.49, -196.74, -0.73%
Over in Seoul, shipbuilders outperformed, rebounding from recent losses, with STX Offshore & Shipbuilding Co. surging 5%, while Daewoo Shipbuilding & Marine Engineering Co. /zigman2/quotes/209608086/delayed KR:042660 -0.65% added 2.5%.
In Hong Kong, shares of Kunlun Energy Co. /zigman2/quotes/207929595/delayed HK:135 -1.69% /zigman2/quotes/204365556/delayed KUNUF -2.08% climbed 3.1% on news it will become the Hang Seng Index’s 50th constituent, with effect from Dec. 10.
Other energy shares also rallied in Hong Kong, as New York crude-oil prices extended gains to edge closer to $88 a barrel, with PetroChina Co. /zigman2/quotes/204979431/delayed HK:857 -0.94% /zigman2/quotes/205108732/composite PTR -2.35% climbing 0.8% and China Coal Energy Co. /zigman2/quotes/201486584/delayed HK:1898 +0.77% /zigman2/quotes/205321671/delayed CCOZY -1.24% adding 1.4%.
On the downside in Hong Kong, Ping An Insurance Group Co. /zigman2/quotes/202773380/delayed CN:601318 -0.45% /zigman2/quotes/202212125/delayed PNGAY -1.16% /zigman2/quotes/210315058/delayed HK:2318 -0.56% fell 1.9% on news HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 -0.80% is in talks for the possible sale of its 15.6% stake in the Chinese insurer. Shares of HSBC /zigman2/quotes/202687335/delayed HK:5 -0.80% climbed 1% in Hong Kong. Read: HSBC to sell 15.6% stake in Ping An Insurance.
On the Chinese mainland, property developers declined after official data released Sunday showed that average prices in 70 cities remained unchanged in October from the preceding month, amid worries controls on the sector may not be eased anytime soon. Read: China new-home prices flat during October.
Real-estate names weakened Shanghai trading following the data, as shares of Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +4.78% dropped 1.5% and Cinda Real Estate Co. /zigman2/quotes/203103696/delayed CN:600657 +2.63% lost 0.3% in Shanghai. In Shenzhen, China Vanke Co. lost 0.5%.