Most of the stock markets in the Asia-Pacific region are closed on Friday on account of Labor Day. Among the markets that were open, the Japanese stock market closed at a near four-month high, while the Australian and New Zealand markets closed lower in subdued trading. Investors remained cautious as they await key events next week, including the outcome of the stress tests on U.S. banks.

Overseas, the U.S. markets moved lower on Thursday, after seeing considerable early strength, as traders reacted to news that auto giant Chrysler has filed for Chapter 11 bankruptcy protection. The major U.S. averages eventually ended the day mixed.

Crude oil was trading at $50.79, down $0.33 or 0.65% in late Asian trades Friday. Crude oil closed higher on Thursday on the New York Mercantile Exchange, gaining $0.15 to settle at $51.12.

In the currency market, the U.S. dollar closed higher against the Japanese yen and the Australian dollar on Friday, while it closed unchanged against the New Zealand dollar. In Tokyo, the dollar closed trading at 99.34-99.36 yen, up 1.68 yen from Thursday's close of 97.66-97.68. In Sydney, the Australian dollar closed at US$0.7301-US$0.7305, compared to Thursday's close of US$0.7334-US$0.7337. In Wellington, the New Zealand dollar closed unchanged from Thursday, at US$0.5655.

The Japanese stock market closed at a near four-month high on Friday, extending gains from the previous session. Receding worries about the global economy and hopes of revival in earnings growth from the corporate sector buoyed investor sentiment. Additionally, exporters gained on the back of a weaker yen.

Despite weaker-than-expected March data on Japanese consumer prices and unemployment rate Friday morning, the market remained hopeful that results of the government's economic stimulus measures will gradually be felt. Troubled U.S. automaker Chrysler's filing for bankruptcy protection had largely been factored in over the past few weeks.

The benchmark Nikkei 225 Index closed at 8,977.37, up 149.11 points, or 1.69%. This is the first time since April 20 that the Nikkei has closed above 8,900. The broader Topix Index of all First Section Issues gained 9.06 points, or 1.08%, to close at 846.85.

The Japanese markets will be closed from Monday to Wednesday for national holidays.

On the economic front, the seasonally-adjusted unemployment rate is Japan surged to 4.8% in March, the Ministry of Health, Labor and Welfare said on Friday. That was higher than analyst expectations for a 4.6% increase following the 4.4% gain in February. The job-to-applicant ratio fell to 0.52 - worse than expectations for a ratio of 0.55 after posting 0.59 in February.

Japan's core inflation eased 0.1% on year in March, the Cabinet Office said. That marks the first annual decline since September 2007 and raises the fears of a return to deflation. Analysts had been expecting a 0.2% decline following a flat performance in April. Overall national inflation was down 0.3% on year, in line with forecasts following a 0.1% annual decline in February. CPI minus fresh food and energy also eased an annual 0.3% - slightly worse than predictions for a 0.2% decline after a 0.1% fall in the previous month.

Meanwhile, Japan's domestic automobile sales dropped 28.6% year-on-year in April to 166,365 units from 232,993 units a year earlier, the Japan Automobile Dealers' Association said Friday. In March, vehicle sales declined 31.5%.

In Friday's trading, banking stocks closed mixed. Sumitomo Mitsui rose 4.12% and Mizuho Financial added 0.49%, while Mitsubishi UFJ eased 0.37% and Resona Holdings edged down 0.46%. Sumitomo Mitsui and Citigroup Inc. said Friday they have reached an agreement in which Sumitomo Mitsui will acquire most of Citigroup's Tokyo brokerage operations, for yen 545 billion, effective October 1.

Japan's largest bank Mitsubishi UFJ said that it now expects to post a loss for the year ended March 31, 2009 due to rising credit costs and losses on its equity holdings.

Among exporters, Canon surged 6.10% and Sony gained 1.98%. Canon lifted its earnings outlook on a weaker yen and cost cuts. Automaker Honda added 0.35% and Toyota advanced 1.30%.

Shipping and trading companies closed sharply higher on hops that they may benefit from a recovery in the Chinese economy. Among trading houses, Mitsubishi Corp. gained 5.96%, Mitsui & Co. rose 6.45% and Itochu surged 9.89%. In the shipping sector, Kawasaki Kisen rose 6.50% and Mitsui OSK Lines surged 5.35%. Among oil stocks, Inpex gained 4.3% and Nippon Oil rose 2.73%.

Shares of computer maker Fujitsu climbed 18% after it forecast a return to profit. The company said late Thursday that it will likely post group net profit of 20 billion yen for the current year through March 2010, compared to loss of 112.3 billlion yen in the year that ended March 2009.

Mobile phone operator Softbank Corp. said Thursday that it will halve its interest-bearing debt by the end of fiscal 2011 and completely pay it down in fiscal 2014. The company also said it was eyeing raising its dividend due to brisk growth in mobile phone subscriptions. Shares of the company closed up 10.77%.

The Australian stock market closed in negative territory in quiet trading on Friday, after opening weaker following the overnight subdued close on Wall Street. Investors also await economic news due out from the U.S next week.

The benchmark S&P/ASX 200 Index declined 10.90 points, or 0.29%, to close at 3,769.60 and the broader All Ordinaries Index lost 6.80 points, or 0.18%, to settle at 3737.90.

Mining stocks closed lower, while banking stocks closed mixed.

On the economic front, manufacturing activity in Australia declined to a new low in April, as recorded by the Australian Industry Group. The AIG's Performance of Manufacturing Index, released Friday, declined 3.1 points to 30.1, the lowest reading since the survey was instituted in 1995. Readings below the 50.0 mark indicate contraction of activity in the sector. The AIG said manufacturing activity has been in contraction since June 2008.

In the mining space, BHP Billiton eased 0.81% and Rio Tinto edged down 0.39%. Among gold mining stocks, Newcrest Mining added 0.37%, while Lihir Gold lost 2.00% and Sino Gold slid 3.00%. Shares of zinc and lead producer Oz Minerals rose 4% after the company won a further-two month extension on A$1.1 billion in debt, giving it time to complete a A$1.2 billion sale of Minmetals.

Among banks, Commonwealth Bank of Australia eased 0.17%, while ANZ Bank and National Australia Bank added 0.63% each. Macquarie Group posted a 52% fall in annual profit, its first fall in full-year profit in seventeen years. The company's stock is in a halt pending a capital-raising.

In the retail sector, Woolworths declined 1.12%, Harvey Norman edged down 0.67% and David Jones gave away 0.66%. Wesfarmers added 0.27%.

Among oil stocks, Woodside said its annual profit for 2009 will be lower than the prior year due to lower oil prices. The company also said that salaries for its employees, except those undergoing promotion, will be frozen for at least the next six months. However, the company's shares edged up 0.10%.

Shares of Lynas Corp. jumped 50.9% after it agreed to a deal with China Non-Ferrous Metal Mining Co. Ltd., or CNMC, under which CNMC would become a majority shareholder in Lynas.

The New Zealand stock market closed lower on Friday, ending a five-day winning streak. The market had opened higher, holding on to the positive momentum attained in the previous session after the Reserve Bank of New Zealand slashed interest rates.

The benchmark NZX 50 Index declined 20.67 points or 0.75% to close at 2,719.91 and the broader NZX All Capital Index lost 24.64 points or 0.88% to settle at 2,770.11.

Among the top stocks, Telecom slid 6.74%. Rival Vodafone plans to initiate legal action against Telecom, alleging that Telecom's new network was the source of interference on its network.

Meanwhile, Contact Energy added 0.18% and Fletcher Building advanced 0.60%. Fletcher said it is now planning to seek NZ$120 million through a share issue to retail investors, up from its prior plan to raise NZ$100 million. The company intends to use the money to pay down debt.

In the retail sector, Hallenstein Glasson gained 1.95%, Pumpkin Patch advanced 1.67% and the Warehouse Group rose 3.06%. Jeweler Michael Hill remained unchanged.

Among other notable stocks, Nuplex lost 2.78% and Sky City declined 1.09%, while Steel & Tube rose 3.15% and Fisher & Paykel Appliances surged 4.35%. Methven jumped 9.43%. Energy scrip TrustPower added 0.42%, while Vector lost 1.39%.

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