Japanese shares jumped more than 2% on Wednesday as the yen weakened against a stronger dollar and recent surveys suggest global manufacturing sectors might be seeing a strong turnaround.
The Nikkei 225 Index returned – big-time – from a long holiday weekend to rocket 479.79 points, or 2.5%, to open the year at 19.594.16.
The Hang Seng Index in Hong Kong eased 15.93 points, or 0.1%, to 22,134.47
The final Nikkei Japan manufacturing Purchasing Managers Index (PMI) rose to 52.4 in December, beating a preliminary reading of 51.9 and November's 51.3. A figure above 50 represents expansion in a sector, while a reading below 50 indicates contraction.
The private survey indicates Japan's manufacturing sector is seeing signs of recovery, with increased domestic and global demand. It follows an upbeat China's Caixin manufacturing PMI on Tuesday to its best since January 2013, aiding regional sentiment.
Major Japanese exporters were all sharply higher, particularly car makers, because a weaker yen would increase the value of profits earned overseas when it is repatriated and make Japanese exports cheaper for foreign buyers.
Toyota was up 3.2% at 7,097 yen, while Honda advanced 4.6% to 3,571 yen. Takata rallied 17.5% or 150 yen at 1,007 yen per share, to hit its daily price limit. The airbag maker had gained 65% or 400 yen per share since last Wednesday, when news broke that the company could settle U.S. criminal charges by next month related to faulty equipment.
Electronics giant Sharp was up 8.5% to 293 yen per share, after jumping as high as 10.3% to two-year highs, after news that it plans to co-build a 61-billion-yuan ($8.8-billion U.S.) factory in China with Hon Hai Precision Industry to produce liquid-crystal displays. Shares of Hon Hai slipped 0.1% to 84.20 Taiwanese dollars.
Earlier, Toshiba plunged as low as 6.9 % to 263.5 yen each share at the open after Asahi Shimbun reported a Japanese security watchdog suspects the company padded profits by 40 billion yen in the past three years.
Shares of the Japanese conglomerate recovered from earlier heavy losses to trade down 2% at 277.4 yen in an extremely volatile session. The stock has fallen nearly 37% since last Dec. 26.
Hong Kong-listed casino stocks were mostly lower, with Wynn Macau down 1.3%, Sands China slipping 0.5% while Melco International Development was up 2.35%
South Korea's Kospi ended nearly flat, after South Korea's finance minister said the economy's recovery momentum will likely slow this year, and its time for fiscal policy to play a more active role to boost growth
The country is also in the midst of a months-long political scandal, with President Park Geun-hye refusing to testify on Tuesday in the impeachment trial that is set to determine her future, after denying charges of wrongdoing over the weekend.
Against the U.S. dollar, the yen continued to weaken for the fifth straight session, at 118.02, while the Australian dollar was tracking $0.724.
CHINA
In Shanghai, the CSI 300 gained 26.08 points, or 0.8%, to 3,368.31
The People's Bank of China's latest reporting framework for financial institutions on "large sum" and "suspicious" transactions will come into effect from July onward, and is the latest in a series of capital controls to control yuan outflows.
In other markets
In Korea, the Kospi returned to business, adding 1.67 points to 2,045.64
The Straits Times Index in Singapore strengthened 22.34 points, or 0.8%, to 2,921.31
In Taiwan, the Taiex Index gained 14.08 points, or 0.2%, to 9,286.96
In New Zealand, the NZX 50 returned to trading with a gain of 93.08 points, or 1.4%, to 5,974.30
Australia's ASX 200 inched up 3.23 points, or 0.1%, at 5,736.41
