Markets in Asia soared to their highest levels in roughly two months on bets of easy-money policies from global central banks.
The Nikkei 225 index shot higher 389.43 points, or 2.1%, to 18,825.30
In Hong Kong, the Hang Seng bolted higher 306.57 points, or 1.3%, to 23,151.94
Japan rose 2.9% this week, leading Asian stock markets. Hong Kong shares, up 0.4% this week notched their fourth straight week of gains.
Most of the rally came Friday, after comments by European Central Bank President Mario Draghi, who signaled the bank is prepared to undertake another stimulus package in December.
Meanwhile, patchy U.S. economic data has deferred expectations for a rise in interest rates, extending the period of ultra-low rates that has helped fuel a years-long rally in global markets. Bleak economic data in Japan, too, has lifted hopes its central bank will announce fresh action at its policy meeting next week.
In an interview with The Wall Street Journal, an adviser to Prime Minister Shinzo Abe, Etsuro Honda, was cautious about whether the Bank of Japan should unleash more easing now. Inflation will likely "get very close to 2%," the central bank’s target, by the end of next year, he said. Instead, Honda recommended an up to ¥5 trillion ($41 billion U.S.) stimulus package to quickly boost private spending.
Still, sluggish inflation and exports loom over the central bank. Honda said an increase in annual asset purchases to ¥100 trillion from ¥80 trillion currently, would be the most likely step if the bank decides to act.
Japanese shares have risen more than 10% since their recent low on Sept. 29, on stimulus hopes.
A weakening yen has given an added boost to shares of Japanese exporters, which benefit when dollar earnings are repatriated from abroad. The Japanese currency, however, rose against most other major currencies late Friday, with the U.S. dollar buying 120.48 yen, compared with ¥120.69 late Thursday in New York.
Shares of auto maker Honda Motor Co. were up 4%, electronics-parts maker Murata Manufacturing Co. gained 3.8% and semiconductor production equipment maker Tokyo Electron Ltd. rose 2.6%.
Korean consumer stocks like cosmetics maker Amorepacific Corp. and LG Household & Health Care Ltd. are up 69% and 48% year to date, compared with 7% for the broader market.
The prospect of more stimuli from the ECB lifted emerging-market currencies on Friday, too.
CHINA
The CSI 300 in Shanghai gained 46.71 points, or 1.3%, to 3,571.24
Meanwhile, the region has largely brushed of a choppy week for China shares, which edged up 0.6% this week. Volatility on the mainland’s smaller technology-share board sparked panic selling that sent the Shanghai benchmark plunging 3% Wednesday.
Low volume has magnified some of the gains and losses on mainland shares this week.
Daily volumes for A shares, or yuan-denominated domestic stocks, averaged at one trillion yuan ($157.3 billion U.S.) this week, compared with a recent 370.7 billion yuan low on Sept. 30. Still, they remain down 58% from a record on 2.3 trillion reached on May 28, just before stocks sold off during the summer.
On Monday, China reported its slowest pace of growth in the third quarter since 2009. But poor economic news has been good news for stocks, as expectations of stimulus has buoyed markets in recent weeks. Shanghai bounced as much as 17% from its recent low on Aug. 26 to its close on Oct. 20.
Investors are now looking to China’s fifth plenum from Oct. 26 and Oct. 29 where leaders will announce a draft of their 13th Five Year Plan, a sprawling blueprint that sets the direction for China’s economic and social development.
To be sure, glimmers of positive economic news have emerged. Service-growth appears holding up in China, with housing prices rising for the fifth straight month on Friday. South Korea also reported its economy grew at its fastest pace in five years in the third quarter, as domestic consumption offset slumping exports.
Shanghai-listed spirits maker Kweichow Moutai Co. is up 22% this year, making the firm one of the best performing among the exchange’s largest 50 stocks.
In other markets
The Kospi index in Korea recovered 17.4 points, or 0.9%, to 2,040.4
Taiwan’s Taiex index recouped 65.35 points, or 0.8%, to 8,673.81
In Singapore, the Straits Times Index gained 30.35 points, or 1%, to 3,068.46
The NZX 50 moved higher 47.06 points, or 0.8%, to 5,970.67
The ASX 200 Index picked up 87.72 points, or 1.7%, to 5,351.57
