Singapore: Asian shares rose on Friday after encouraging US retail sales and jobs data suggested Asia’s biggest export market was stabilising, while the yen slipped after a report that the Bank of Japan may consider further monetary easing steps to prop up its economy.
The Bank of Japan is likely to debate this month easing its ultra-loose monetary policy again as it remains under government pressure to help pull the country out of grinding deflation, said sources, who declined to be named due to the sensitivity of the matter.
Japan’s finance minister Naoto Kan said he would welcome any BOJ action to help beat deflation but had not heard directly from the central bank about what it was considering.
“The government wants the BOJ to do something more toward the end of the fiscal year (on 31 March ). In addition, there are uncertainties in financial markets, especially FX, because of the Greek fiscal problems, etc,” said Naomi Hasegawa, a senior fixed-income strategist at Mitsubishi UFJ Securities Japan.
Market players welcomed the possibility, noting that March is the last month of the Japanese business year and a weaker yen would have a positive impact on earnings for Japanese firms. A stronger yen eats into exporter profits when repatriated. The MSCI index of Asian shares outside Japan was up about 0.9 percent. The index is still down more than 2% so far this year.
Japan’s Nikkei average jumped 2% as the BOJ report helped the yen to weaken and after better-than-expected US monthly retail sales.
Exporters climbed after the yen weakened and Wall Street rose on the encouraging US economic data. Retail sales were thought to have been hurt by the severe weather across the United States last month.
Kyocera rose 2.6% and Sony Corp rose 3.4%.
Canon Inc, which declared its bid for Oce unconditional, sending a clear message to shareholders holding out for a better deal it is set to tie up the acquisition, was up 2.4%.
However, investors were wary ahead of the weekend and US jobs data.
Hong Kong shares rose 1% with exporter Li & Fung leading gains on hopes of a recovery in the U.S. economy, while Premier Wen Jiabao’s reaffirmation of China’s monetary and fiscal policies lifted China stocks.
Jiabao said that China would stick to an “appropriately easy monetary stance” and a “proactive fiscal policy” as it sought to counter the lingering impact of the international credit crunch.
Shares in Shanghai rose 0.3%.
“One of the main reasons for today’s rise was just a bounce from the big drop yesterday, but the news that index futures will begin trading in April was also a positive factor,” said Zheng Weigang, analyst at Shanghai Securities.
Australian stocks rose for the fourth straight week, climbing 0.4%, after the encouraging U.S. data convinced investors the global economy was recovering.
“With a relatively robust backdrop, absence of any major dramas from the Eurozone, the market managed some modest gains across the boards,” David Taylor, a market analyst at CMC Markets said.
“Recent strength in the price of gold and the Aussie dollar too are indicative of a more confident market.”
South Korean shares rose 1% fueled by firm rises in tech heavyweights, including Samsung Electronics, while Kumho Asiana Group issues rallied as hopes for the sale of stakes in unit Daewoo Engineering & Construction strengthened.
Taiwan stocks rose 1.3% to a five-week closing high, with TSMC leading tech shares higher on lower-than-expected production losses after a strong earthquake.
Shares in Singapore rose less than a% while those in India rose 0.1%.
Gold edged up on bargain hunting before the release of U.S. payrolls data, which could raise concerns about the pace of an economic recovery and hurt the dollar while lifting the bullion’s allure as an alternative investment.
Crude climbed, capping two consecutive weeks of trading above $80, after China signalled it would maintain its economic stimulus, rekindling hopes for accelerating growth to drain excess oil supplies.