Asian markets rise, yen weakens on Japan stimulus

Asian markets rise, yen weakens on Japan stimulus

HONG KONG - Asian markets mostly climbed on Friday after data showed the US economy grew more than first expected in the third quarter while traders remain upbeat a deal will be made on averting the fiscal cliff.

The yen eased further against the dollar and euro after the Japanese government announced a huge spending spree to kickstart the economy just weeks before a general election.

Tokyo closed 0.48 per cent, or 45.13 points, higher at 9,446.01, Sydney ended up 0.63 per cent, or 28.3 points, at 4,506.0 but Seoul finished 0.10 per cent, or 1.95 points, lower at 1,932.90, reversing early day gains.

Hong Kong closed 0.49 per cent higher adding 107.50 points to 22,030.39, while Shanghai was up 0.85 per cent, or 16.63 points, at 1,980.12.

The US Commerce Department said Thursday the economy grew 2.7 per cent in the three months to September, faster than the 2.0 per cent first estimated, reflecting in part increases in government spending and private inventory investment.

However, growth in consumer spending, which accounts for 70 per cent of output, was revised down to 1.4 per cent, just slightly above the second-quarter pace.

Also, jobless claims fell back to 393,000 in the most recent week, the Labor Department said Thursday.

The figures provide a general view that the country is gradually getting back on its feet, which will have a positive knock-on effect for the global economy.

Lawmakers in Washington are locked in tough talks on averting the fiscal cliff of tax hikes and spending cuts to come into effect on January 1, which could tip the economy back into recession.

But while Republican House Speaker John Boehner has rejected as "ridiculous" President Barack Obama's first proposal to cut the country's deficit, investors are broadly confident a deal will be achieved by the end of the year.

Wall Street's main indexes finished in positive territory for a second straight day. The Dow was up 0.28 per cent, the S&P 500 gained 0.43 per cent and the Nasdaq added 0.68 per cent.

On currency markets traders sold the yen further after reports said the cabinet of Japan's Prime Minister Yoshihiko Noda approved a US$10.7 billion stimulus ahead of December 16 polls that his ruling party is expected to lose.

The yen has taken a hit this month after Shinzo Abe, the leader of the opposition and the man expected to become prime minister after the vote, said he would push a more aggressive monetary easing policy.

In the afternoon the dollar rose to 82.58 yen from 82.10 yen in late Thursday New York trade, while the euro bought 107.46 yen, compared with 106.58 yen. It was also at US$1.3012, from US$1.2978.

The dollar is up 3.5 per cent against the yen in November, while the euro has risen 3.3 per cent.

Also providing a little support to Tokyo shares was news of a surprise rise in Japan's factory output for October.

Production grew 1.8 per cent from the previous month, the first rise in four months and beating an average market forecast of a 2.2 per cent drop.

On oil markets New York's main contract, West Texas Intermediate for January delivery, was down 21 cents to US$87.86 a barrel in the morning, and Brent North Sea crude for January dropped 10 cents to US$110.66.

Gold was at US$1,728.37 at 1040 GMT compared with US$1,724.60 late Thursday.

In other markets:

Taipei rose 1.02 per cent, or 76.62 points, to 7,580.17.

HTC was up 2.7 per cent at Tw$266.0 while TSMC gained 2.28 per cent to Tw$98.7.

Wellington rose 0.83 per cent, or 33.32 points, to 4,050.09

Fletcher Building up 1.41 per cent at NZ$7.92, Chorus rising 1.8 per cent to NZ$3.40 and Telecom Corp down 1.70 per cent at NZ$2.31.

Kuala Lumpur was up 0.22 per cent, or 3.51 points, at 1,610.83.

IHH Healthcare added 3.3 per cent to 3.48 ringgit while Axiata Group rose 0.2 per cent to 5.92 ringgit.

Jakarta ended down 0.99 per cent, or 42.95 points, at 4,276.14.

Mobile phone provider Indosat dropped 11.9 per cent to 5,550 rupiah and palm oil producer Astra Agro Lestari fell 3.23 per cent to 18,000 rupiah.

Bangkok rose 1.10 per cent, or 14.47 points, to 1,324.04.

Coal producer Banpu lost 0.75 per cent to 395.00 baht while energy giant PTT gained 0.63 per cent to 320.00 baht.

Singapore closed 0.80 per cent, or 24.05 points, higher at 3,069.95.

Farm commodities supplier Olam, which has come under attack from US research firm Muddy Waters, was up 0.96 per cent to S$1.575 after falling sharply over the past two weeks.

Mumbai rose 0.88 per cent, or 168.99 points, to 19,339.90 points.

Private steel producer Jindal Steel rose 5.39 per cent to 402 rupees while state-run oil explorer ONGC rose 4.44 per cent to 264.9 rupees.

Manila was closed for a public holiday.

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