Japanese shares closed at a six-year high Tuesday, propelled steadily upward as investors looked to developed Asia for returns, indicating growing faith in Japan’s reform agenda.
Japan’s Nikkei 225 index returned from a long weekend to gain 18.91 points, or 0.1%, to 15,889.33, a level last reached in December 2007. The market’s year-to-date gains hit 53.8% and making it by far Asia’s top performer.
Japan’s Cabinet Office released a monthly economic report Tuesday, omitting the word "deflation" in its description of the economy for the first time in four years, saying instead that "prices hold firm."
The change in terminology may be small, but will likely be seen as a sign by investors that the government is optimistic that Japan is close to escaping years of falling prices.
The Bank of Japan published its own cautiously positive economic report, in which it said Japan’s economy would likely continue a moderate recovery but faces risks from uncertain global growth and a consumption tax hike due to kick in next April.
Among Japanese gainers were telecommunications provider KDDI Corp., which gained 3.1%, and machinery manufacturer Fanuc Corp., up 1.8%. The yen was little changed late Tuesday, trading level at ¥104.20 to the U.S. dollar, from ¥104.19 late Monday in New York.
Hong Kong’s Hang Seng Index rocketed 257.99 points, or 1.1%, to 23,179.55
Shares in Australia gained for a fourth-straight session, despite news Monday that stricter capital reserve requirements would be imposed on local banks as the new minimums were on the lower side of expectations. Westpac Banking Corp. and Commonwealth Bank of Australia added 0.7% and 0.5%, respectively.
Mobile technology giant Samsung Electronics Co. was trading 1.3% lower in South Korea after researchers at Israel’s Ben-Gurion University of the Negev said they had found a security vulnerability in the company’s flagship Galaxy S4 smartphone. Samsung has said it takes all such claims seriously and will investigate, but doesn’t believe the problem is as serious as the researchers suggest.
CHINA
Chinese stocks traded higher for a second consecutive day, cementing a recovery from over two weeks of losses despite a stubborn cash crunch that has led interbank lending rates to hit a six-month high, starving the system of liquidity.
Shanghai’s CSI 300 index gained 3.65 points, or 0.2%, to 2,288.25.
The stresses began to ease Tuesday, with the benchmark seven-day repurchase agreement rate down to 5.5% from 8.94% Monday, releasing cheaper cash into the financial system and buoying markets
In other markets;
Korea’s Kospi Index added 4.70 points, or 0.2%, to 2,001.59
Taiwan’s Taiex Index erased 5.97 points, or 0.1%, to 8,450.49
The Singapore Straits Times Index progressed 11.07 points, or 0.4%, to 3,127.29
In New Zealand, the NZX 50 picked up 45.30 points, or 1%, to 4,767.93
In Australia, the S&P/ASX 200 took on 35.25 points, or 0.7%, to 5,327.20
