Asian stock markets mostly advanced Monday, led by gains in Japanese shares after the Group of 20 Finance Chiefs' meeting refrained from criticizing the Bank of Japan's (BOJ) aggressive monetary easing measures.
Japan's benchmark Nikkei surged 1.89 percent or 251.89 points to close at 13,568.37 after climbing as much as 2.2 percent during intraday to touch its highest level since June 2008, South Korea's KOSPI Composite gained 1.03 percent and India’s BSE Sensex advanced 0.35 percent while Hong Kong's Hang Seng advanced 0.52 percent and Chinese Shanghai Composite fell 0.11 percent.
Market sentiment turned positive as investors interpreted a statement from the Group of 20 major economies over the weekend as its support to Japan’s aggressive easing policy as long as policies were aimed to stimulate growth in the world's third largest economy and not at weakening its exchange rate.
“We’re just at the beginning of a prolonged rally in Asian equities. It’s a clear path for Japan to continue with what it has previously announced – it’s been validated by the G-20. I’m pretty optimistic and stocks, relative to fixed-income instruments, look very, very attractive,” Kenneth Taubes, chief investment officer of Pioneer Investments, which oversees about $249 billion worth assets, told in a Bloomberg Television interview from Hong Kong.
The Japanese yen has weakened more than 20 percent against the U.S. dollar since mid-November and came under pressure earlier this month after BOJ announced bold monetary easing measures in its first policy meeting under newly-appointed chief Haruhiko Kuroda. The dollar is currently trading at 99.81 yen after touching an intraday high of 99.89 yen and is expected to hit the psychologically important 100 level.
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“We expect USD/ JPY to remain a buy. There is little scope for the BoJ to become less aggressive on monetary policy. So far the central bank appears to avoid any major criticism regarding its monetary policy stance, especially with inflation still running negative,” a note from Credit Agricole said.
Japanese shares rallied, led by gains from exporter and financial companies shares. Nissan Motor Co Ltd. surged 2.63 percent and Canon Inc. gained 1.75 percent while Shinsei Bank Ltd. advanced 2.32 percent.
Meanwhile, insurance companies’ shares declined in China and Hong Kong after a deadly 7- magnitude earthquake shook the Sichuan province of China Saturday, which killed 186 people and injured at least 5,500.
New China Life Insurance Co Ltd. declined 1.47 percent and Ping An Insurance Group 1.41 percent in Hong Kong, while China Life Insurance Co Ltd. plunged 2.55 percent in Shanghai.