Asian Shares Rise on Rumors of Easing Measures from Bank of Japan
Asian shares rose Thursday. In Japan the Nikkei 225 Index climbed 1.3% to 9,363, and in China the Shanghai Composite Index rose 0.8% to 2,688. Hong Kong's Hang Seng Index added 0.2% to end the day at 21,072.
Asian markets looked rosier after investors poured money in on whispers that the Bank of Japan could begin easing measures to curb the rise in the yen. There is also talk that it could boost credit to financial institutions to $351 billion, according to Bloomberg. The recent hike in the yen is eating away at exporters' profits when they repatriate earnings back to Japan, shaving value off the country's gross domestic product. The yen has reached its highest value in 15 years. According to AFP, an announcement of new measures is expected later this week, but some say Bank of Japan officials worry that swings in the currency could hurt the economy in the long run.
Today's big winners in Tokyo included Mitsubishi Estate Co, a real estate firm, as investors bet that new measures will mean continued low mortgage rates. Mitsubishi Estate climbed 3.4%. Other property companies also advanced with Mitsui Fudosan surging 3.1% and Sumitomo Realty & Development rising 2.2%.
Japanese carmakers also posted strong results with Mazda spiking 3.6%, despite the announcement of a new recall in the U.S. The company is recalling over 300,000 Mazda3 and Mazda5 cars with power-steering problems, according to the Japan Times. Mazda says so far no crashes have been reported as a result of the defect. Other car manufacturers also rose today with Nissan soaring 3.1%, Isuzu surging 2.6%, Fuji Heavy Industries, maker of the Subaru, rising 2.1% and Toyota advancing 1.8%.
Other top-performing stocks included computer services company CSK Holdings, which skyrocketed 6.8% and Advantest, a semiconductor testing device maker, which rose 3.8%.
In China a surge in banking shares pushed the index higher, more than canceling out losses in the real estate sector. China Everbright Bank added another 1.1% to its 18% gain on yesterday's IPO, which beat Agricultural Bank of China's disappointing 0.8% rise in its debut last month. Everbright ranks as the second largest IPO this year, coming in at $2.8 billion -- far lower than Ag Bank's record-setting $22.1 billion. Other banking shares also rose today with China Merchants Bank climbing 2.2%, Shanghai Pudong Development Bank gaining 1%, China Construction Bank adding 0.8% and Industrial & Commercial Bank of China advancing 0.7%.
Meanwhile, Chinese real estate stocks slumped on reports that Beijing could introduce further measures to rein in mortgage lending. China Vanke tumbled 2.5%, Poly Real Estate fell 2.2% and Gemdale dropped 0.9%.
In Hong Kong, TVB, a Hong Kong television broadcaster and producer, rallied 4.2% after announcing an increase of first half of the year profit of 77%, and China Resources Enterprise, with businesses ranging from food processing to clothing retailing, climbed 3.7%.
In the energy sector, China Shenhua, which provides coal-based power, spiked 4.9% and China Petroleum & Chemical Corp. surged 3.9%.
Hong Kong property shares continued their upward trend with Sun Hung Kai advancing 1.9%, China Overseas rising 1.6% and New World Development adding 0.8%. Prices seem unsustainable as they near the all-time highs seen in 1997, but rising demand coupled with a dearth of new plots of land available to develop could help prices go even higher.