Last updated: December 27, 2012 10:07 am

Exporters lead jump in Japanese shares

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Asian markets extended gains with Japanese shares jumping to their highest level since the March 2011 earthquake after the yen touched a 27-month low on expectations of more monetary policy easing.

The Nikkei 225 Stock Average advanced 0.9 per cent to 10,322.98 as exporters were buoyed by the weaker yen. Taro Aso, Japan’s new finance minister, on Wednesday signalled that the government will borrow to boost the struggling economy, unveiling plans to issue bonds and lift a cap on new debt for the 2012 fiscal year.

The yen fell to a 27-month low of Y85.77 against the US dollar, compared with Y85.58 in New York late on Wednesday. Against the euro, the yen was trading at Y113.36, versus Y113.17.

Carmakers and industrial exporters led gains. Mazda Motor, which achieves nearly 30 per cent of its sales in North America, surged 7.1 per cent to Y166 and Mitsubishi Motor advanced 6.2 per cent to Y86. Nippon Sheet Glass, which obtains about 70 per cent of its revenues from outside Japan jumped 15.8 per cent to Y110. Nisshin Steel Holdings rose 9.7 per cent to Y813.

Gains were limited elsewhere in Asia by lingering worries about the fiscal impasse in the US, which could drag the economy into recession. President Barack Obama cut short his Christmas holiday for last-ditch budget talks to avert a series of tax rises and spending cuts that due to start on January 1.

South Korea’s Kospi Composite index inched 0.3 per cent to 1,987.35. The government cut growth forecasts for this year and next as Asia’s fourth-largest economy feels the pinch of Europe’s debt crisis and the global economic slowdown. Seoul lowered its economic growth forecast for this year to 2.1 per cent from an earlier projection of 3.3 per cent and its outlook for next year to 3 per cent from 4 per cent.

Telecom shares were among the declining stocks, hit by profit-taking. KT Corp dropped 5.3 per cent to Won35,500 after saying on Wednesday that it had submitted a preliminary bid for a Moroccan telecoms company. SK Telecom shed 4.1 per cent Won152,000.

Australia’s S&P/ASX 200 index gained 0.3 per cent to 4,647.97 with iron ore miner Fortescue Metals jumping 4.1 per cent to A$4.53 on plans to resume expansion work in the new year on its Kings deposit in the Pilbara region. Retailers gained ground as customers returned to stores for post-Christmas shopping: Myer Holdings advanced 2.9 per cent A$2.13 and David Jones rose 3 per cent A$2.41.

Hong Kong’s Hang Seng index rose 0.4 per cent to 22,619.78 as the city’s market reopened after a two-day holiday. China’s Shanghai Composite index slipped 0.6 per cent to 2,205.9 on profit-taking after gaining more than 10 per cent in December.

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