The Bank of Japan’s plans to buy up to Y1,000bn ($10.7bn) in corporate bonds and China’s decision to broaden attempts to stimulate domestic demand helped push Asia Pacific shares into positive territory for the first time this week.
Shares in Tokyo, helped also by a weaker yen, crept up by 0.3 per cent from their four-month lows reached on Wednesday. On the mainland of China, Shanghai bounced back by 0.8 per cent, partly reversing a 4.7 per cent drop in the previous session, as the State Council in Beijing announced help for the electronics and technology sectors.
The Sydney market rose 1.1 per cent and even shares in Taiwan gained 0.7 per cent in spite of figures on Wednesday that showed economic output shrank at an annual rate of 8.4 per cent during the last quarter of 2008,
However, Singapore was down by around 1 per cent and Indonesian shares lost 0.8 per cent.
Japanese exporters responded positively to the yen’s recent depreciation. The currency traded close to its weakest levels so far this year, and was Y93.50 to the dollar as equity trading wound down in Tokyo.
Exporters had been suffering as the yen’s status as a regional safe haven, and subsequent strength over the past year or so, has made their products less competitive in their main market, the US.
Carmakers and technology companies made some of the biggest gains. Kyocera, a semiconductor and electronics components maker, led the Nikkei’s rally by gaining 4.7 per cent to Y6,000 and Fanuc, which makes robots and computer-controlled tools, rose by 2.6 per cent to Y6,380.
Toyota Motor, which makes more than a third of its sales in the US and Canada, rose 2.0 per cent to Y3,120 and Honda Motor rose by 1.8 per cent to Y2,290. Nissan Motor, which is planning to sell bonds and property to raise cash, rose by 2.8 per cent to Y291.
Overall, the Nikkei 225 average closed 0.3 per cent higher at 7,557.65 and the broader Topix index ended 0.3 per cent higher at 751.59.
In China, technology companies benefited from Beijing’s extension of its stimulus measures to the sector. China National Software & Service, which writes translation programs, rose by 10.0 per cent to Rmb11.46. The computer maker Founder Technology gained 4.1 per cent to Rmb3.82.
The metal producer Baoshan Iron & Steel rose by 4.2 per cent to Rmb5.98 on local media reports that the government would adopt policies to encourage mergers and acquisitions in the domestic steel industry.
The Shanghai composite index closed 0.8 per cent higher at 2,227.13 and in Hong Kong, the Hang Seng index closed 0.1 per cent higher at 13,023.36.
In Australia, Fortescue Metals had a volatile session. The shares jumped 11 per cent as it emerged that Hunan Valin Iron & Steel had held talks the iron ore producer about possible investment. However Fortescue shares closed 3.0 per cent lower at A$2.90 after Valin said it was concerned about the Australian company’s high levels of debt. Valin shares rose 4.4 per cent in Shanghai to Rmb5.88.
Iluka Resources, the world’s biggest producer of zircon, rose by 12.2 per cent to A$4.41 after its second half profits rose 580 per cent helped by bigger sales and a weaker Australian dollar.
The broadcaster Ten Network fell by 14.0 per cent to A$0.80 after scrapping plans to raise A$90m by selling shares just a day after announcing them.
Get alerts on Asia-Pacific equities when a new story is published