Asian Shares Surge -- Even in the Face of Japanese Deflation

Shares in Asia closed higher Friday. In Hong Kong the Hang Seng rose 1.3% to 21,053 and in China the Shanghai Composite Index also added 1.3% to close at 3,060. In Japan the Nikkei 225 Index climbed 1.6% to end the day at 10.996.

Despite the news that prices for consumer products in Japan slid 1.2% in February, making it the 12th month in a row that prices fell, Japanese stocks made huge gains today. Continuously falling prices generally mean bad news, since consumers pick up on the trend and begin putting off purchases of major goods like cars and washing machines, hoping to buy them later with even lower price tags. At the moment, China seems to be Japan's biggest customer for consumer products, since demand in most other countries has fallen.

Today shares for major exporting companies rose in Japan. Alps Electric, which specializes in electronics for the car industry skyrocketed 6.2%, electronics company TDK racked up a 2.7% gain, and Sony surged 2.2%. Camera maker Canon leaped 1.9%.

Even department store operators saw gains today, despite evidence that the Japanese aren't doing much shopping. Aeon surged 3.3%, high-end Takashimaya gained 2.8%, utilitarian UNY advanced 2.1% and Marui Group added 2%. Seven & I, which operates 7-Eleven outlets around the world, grocery stores and Denny's Japan shot up 2.4%. In Asia, 7-Eleven is a major destination, providing services from selling stamps, topping up transportation cards, and processing payment for utility bills to selling the usual fare of fishballs, snickers and Diet Coke.

Among Japanese real estate companies, Heiwa Real Estate tumbled 6.2% and Tokyo Land slipped 0.6%. Mitsubishi Estate climbed 2.7% and Sumitomo Realty made a 2.7% gain. Building company Obayashi soared 5.3% and Kajima spiked 4.8% -- but both companies have major contracts outside of Japan, notably building the Dubai Metro.

Chinese banking stocks rallied, with Huaxia Bank, part-owned by Deutsche Bank, jumped 5.9%. Huaxia reported a 22% rise in net income last year. Shanghai Pudong Development Bank advanced 3%, China Merchants Bank soared 2%, Bank of China rallied 1.7% and China Construction Bank gained 1.3%.

Mainland realty companies rose with Gemdale leaping 3% and Poly Real Estate surging 2%.

Across the sea in Hong Kong, investors seemed jubilant about possible solutions to Greece's debt problems. Developers headed north with Hang Lung Property soaring 3.4%, Sino Land gaining 3.3% and Henderson Land up 2.6%. Cheung Kong surged 2.2%, New World Development climbed 2.1% and Sun Hung Kai advanced 1.5%.

Retailers made headway with Giordano International rocketing 13.3% after JP Morgan raised its rating on the clothier. Esprit Holdings, popular across Europe, especially in Germany gained 4.8%. Bossini, which makes adorable kids clothes and basics for adults cruised up 3.6%. It mainly markets to the local Hong Kong crowd, selling clothes that are priced high enough to make a profit, but low enough to get savvy, bargain-hunting Hong Kongers through the doors.