Asian stocks improved on Thursday, breaking a four-day losing streak as valuations were low enough to tempt investors back into the market.

Analysts were cautious, however, saying that as economic data worsened, hopes for central bank stimulus grew.

“We remain sceptical that policy easing to date will prove sufficient expecting the eurozone sovereign debt crisis to have to intensify further to prompt more significant policy action,” said Lee Hardman at Bank of Tokyo Mitsubishi UFJ.

“The slowdown in global growth appears likely to prove more persistent than last year with downside risks also greater, stemming from the escalating debt crisis in the eurozone, looming fiscal cliff in the US and ongoing slowdown in China.”

The FTSE Asia Pacific index, however, climbed 0.7 per cent to 220.06.

Tokyo’s Nikkei 225 climbed 0.9 per cent to 8,443.1, helped by financial stocks.

Nomura Holdings was top among them, after the financial services group was reportedly poised to name Koji Nagai as the new president of its brokerage division following the resignation of several top executives amid accusations of insider trading at the unit. Shares in Nomura climbed 5.7 per cent to Y259.

A number of other financial stocks figured high on the leader board. Matsui Securities gained 5.3 per cent to Y438, Shinsei Bank added 4.8 per cent to Y87 and Mitsubishi UFJ Financial Group rose 4.3 per cent to Y368.

Top performer was Olympus, the camera and optical machinery maker, after medical device manufacturer Terumo proposed a Y50bn investment that would merge the two companies. Olympus shares jumped 9.6 per cent to Y1,400, while Terumo fell 0.8 per cent to Y3,070.

At the other end of the index was Canon, the printer maker, which fell 7.8 per cent to Y2,470 after it cut its full-year profit forecasts following the market close on Wednesday.

Sydney’s S&P/ASX 200 gained 0.6 per cent to 4,147.73, led by airline group Qantas Airways, which was reported to be close to forming a long-haul alliance with Emirates. Shares in Qantas surged 9.6 per cent to A$1.09.

Seoul’s Kospi Composite finished 0.7 per cent higher at 1,782.47, helped by stronger-than-expected results from carmaker Hyundai Motor, which climbed 1.6 per cent to Won223,500.

Chinese shares underperformed the regional Asia Pacific index, with the Hang Seng ending 0.1 per cent higher at 18,892.79 in Hong Kong and the Shanghai Composite falling 0.5 per cent to 2,126.

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