Japan stocks jump as rest of Asia falls

HONG KONG (MarketWatch) — Japanese stocks extended their rally Friday as the promise of unprecedented monetary stimulus spurred a fresh wave of buying, with the property sector and exporters leading the advance.

Their performance contrasted sharply with deep losses in other regional markets as investors digested an increase in U.S. jobless claims and awaited key employment data later Friday. Stocks in Hong Kong were also hit as airlines and some other sectors got slammed amid reports of deaths linked to a new strain of avian flu.

Japan’s Nikkei Stock Average JP:NIK +1.58%  climbed sharply higher for a third straight day, ending the day 1.6% higher for a weekly gain of 3.5%.

The benchmark had jumped 4% earlier in the day, sailing above the psychologically important 13,000-point level, but let some gains slip by in afternoon trading. The advance came on top of the 2.2% rally Thursday, when the Bank of Japan’s decision to unveil bold policy easing sparked a sharp swing higher for stocks in Tokyo, also spurring shares on Wall Street later in the day, despite the downbeat jobless-claims figures.

Reuters

But markets retreated elsewhere in Asia, with Hong Kong’s Hang Seng Index losing 2.4%, South Korea’s Kospi KR:SEU -1.64%  dropping 1.6%, and Australia’s S&P/ASX 200 AU:XJO -0.45%  falling 0.5%.

Stock markets on mainland China and in Taiwan remained shut for holidays.

“It was the Bank of Japan’s aggressive stimulus measures that provided the real impetus for U.S. markets. ... Given that the U.S. jobless claims data underwhelmed, there is concern the nonfarm payrolls will follow suit and add to the recent run of bearish signals. If this does occur, another sell-off is on the cards, deepening the current correction taking place,” said CMC Markets sales trader William Leys.

Japanese property shares were among the top performers after the central bank said it would buy more real-estate investment trust securities.

Mitsui Fudosan Co. JP:8801 +12.97% MTSFF +5.20%  jumped 13%, Mitsubishi Estate Co. JP:8802 +10.51%   MITEF +2.04%  spiked 10.5% and Sumitomo Realty & Development Co. JP:8830 +12.61% SURDF +12.61%  added 12.6%.

Exporters also enjoyed heavy buying, as the Bank of Japan’s moves helped the dollar soar against the yen. After topping ¥97 earlier in the day, the dollar was more recently buying ¥96.22.

Among the major exporters, Nissan Motor Co. JP:7201 +6.14% NSANY +5.47%  jumped 6.1%, Toyota Motor Corp. JP:7203 +3.35% TM +4.71%  rose 3.4% and Hitachi Ltd. JP:6501 +3.01% HTHIF -1.56%  added 3%.

Honda Motor Co. JP:7267 +0.69% HMC +5.40%  gained 0.7% despite a Kyodo News report that it was recalling more than 145,000 vehicles in Japan.

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Japan's aggressive stimulus dazzles U.S. stock markets

The Bank of Japan's new leaders deliver on their pledge to radically overhaul the bank's monetary-policy program, helping lift Wall Street.Photo: AP.

Also joining the rally were financials, among the sectors expected to benefit from the Bank of Japan’s latest policy actions. Mitsubishi UFJ Financial Group Inc. JP:8306 +5.02% MTU +8.10%  rose 5%, while smaller lender Shinsei Bank Ltd. JP:8303 +8.12% SKLKF +7.73%  leapt 8.1%.

Among other major movers, Seven & I Holdings Co. JP:3382 +10.03%   SVNDF +4.92%  soared 10% after posting a record net profit for its fiscal year ended in February, while forecasting another record-beating performance in the current year.

Asia ex-Japan weakens

Stocks elsewhere slid lower ahead of the U.S. monthly jobs report due later in the day, with Hong Kong shares hit particularly hard as trading resumed after Thursday’s holiday.

Cathay Pacific Airways Ltd. HK:293 -4.06%   CPCAY -1.22%  dropped 4.5% amid concerns about the impact of bird-flu deaths in China on air travel. Among mainland Chinese carriers, Air China Ltd. HK:753 -9.84% AIRYY -1.84%  slumped 8.1%, China Eastern Airlines Corp. HK:670 -8.28%   CEA +1.75%  lost 6.5% and China Southern Airlines Co. HK:1055 -8.51%   ZNH +1.54%  lost 5.7%.

Energy stocks also dropped as U.S. benchmark crude-oil prices remained under $94 a barrel. Shares of Cnooc Ltd. HK:883 -3.88% CEO +0.06%  tumbled 4% and PetroChina Co. PTR +0.52% HK:857 -4.18%  lost 3.7% in Hong Kong, while Australia’s Woodside Petroleum Ltd. AU:WPL -2.03%   WOPEY -0.13% gave up 2% in Sydney.

Financial stocks were also hit outside Japan, with Commonwealth Bank of Australia AU:CBA -1.54%   CBAUF +1.74%  down 1.7%, while KB Financial Group Inc. KB -1.07%   KR:105560 -2.16%  lost 2.2% in Seoul, and China Construction Bank Corp. HK:939 -3.65% CICHY +0.27% dropped 2.9% in Hong Kong.

The weakness for bank stocks kept the Australian market in negative territory, in spite of gains for the largest miners. Helped by a rise in metal futures overnight in London, BHP Billiton Ltd. AU:BHP +1.54% BHP +0.71%  added 1.5% and Rio Tinto Ltd. AU:RIO +1.83% RIO +0.77% gained 1.8%, after the sector took a beating in the previous session.

South Korean car makers fell sharply, in contrast with the auto sector’s strong show in Tokyo, on mounting worries about the impact from a weakening yen that aids their Japanese rivals. Hyundai Motor Co. KR:005380 -4.35%   HYMTF -6.47%  sank 4.4%, and affiliate Kia Motors Corp. KR:000270 -4.69%   KIMTF -1.81% skidded 4.7%.

Samsung Electronics Co. KR:005930 -0.07%   SSNLF +0.71%  slipped 0.1%, outperforming the broader market after issuing a first-quarter forecast for a sharp rise in operating profit.

Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. Follow him on Twitter @MktwKumar. Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles. You can follow him on Twitter at @KitchenNews.