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 /zigman2/quotes/210597971/delayed JP:NIK -0.87% 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 /zigman2/quotes/210598092/delayed JP:180460 -0.50% improved by 3.2%, as the U.S. dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0019% jumped briefly rise above the ¥99-handle, with analysts eyeing further weakness for Japan’s currency.
Tokyo Stock Exchange Enlarge Image
A third straight day of gains for the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.04% 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. /zigman2/quotes/203656770/delayed JP:8316 +0.20% /zigman2/quotes/206471416/composite SMFG +0.35% soared 8.2%, Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 -1.13% /zigman2/quotes/200401218/delayed SHCAY -0.88% rose 8.1%, Mitsubishi Estate Co. /zigman2/quotes/208910776/delayed JP:8802 +1.84% /zigman2/quotes/204837054/delayed MITEY -0.38% climbed 6.7%, Fast Retailing Co. /zigman2/quotes/200663563/delayed JP:9983 -2.11% /zigman2/quotes/203924235/delayed FRCOY -1.57% added 6.2% and Mazda Motor Co. /zigman2/quotes/204777714/delayed JP:7261 -1.61% /zigman2/quotes/206326885/delayed MZDAY +5.10% rose 4.6% in a rally that touched most sectors.
Shares of Renesas Electronics Corp. /zigman2/quotes/203872935/delayed JP:6723 -0.97% /zigman2/quotes/201351352/delayed RNECY +4.33% 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 /zigman2/quotes/210598069/delayed KR:180721 -0.11% climbed 1.6% after jumping 2.9% the previous day, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.56% added 1.8%, and Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.61% slipped 0.2%.
China’s Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -0.83% 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.
The Next 24: Fed back in focus
Fed officials may continue their efforts to soothe the markets on Friday, while Blackberry is due to report before the open.
“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. /zigman2/quotes/203910009/delayed CN:600016 -1.88% /zigman2/quotes/200749234/delayed CMAKY -1.15% climbed 4.4%, paring the loss so far this week to 9.3%, while Bank of Communications Co. /zigman2/quotes/207155262/delayed CN:601328 -1.85% /zigman2/quotes/202128064/delayed BCMXY +1.85% rose 1.8%, narrowing its weekly drop to 4%.
In Hong Kong, gains were spread wider, with China Life Insurance Co. /zigman2/quotes/202359856/delayed HK:2628 -3.74% /zigman2/quotes/206573290/composite LFC +0.08% rising 2.5%, China Overseas Land & Investment Ltd. /zigman2/quotes/205731176/delayed HK:688 -0.80% /zigman2/quotes/202573805/delayed CAOVY -1.73% gaining 4.6%, and personal-products maker Hengan International Group Ltd. /zigman2/quotes/205777105/delayed HK:1044 +1.93% advancing 7.2%.
In Seoul, auto makers and financial stocks advanced, with Hyundai Motor Co. /zigman2/quotes/206684590/delayed KR:005380 0.00% /zigman2/quotes/204364212/delayed HYMTF -2.39% gaining 3.4%, and Shinhan Financial Group Co. /zigman2/quotes/202889287/delayed KR:055550 -0.68% /zigman2/quotes/208869909/composite SHG +1.64% rising 1.5%.