BANGKOK – Asian stock markets rose Wednesday as traders snapped up stocks before the end of the year, while the Tokyo benchmark hit a nine-month high after a new, pro-business government prepared to assume leadership in a country plagued for years by economic lethargy.
Japan’s Nikkei 225 index surged 1.5 per cent to close at 10,230.36 as a further weakening yen gave momentum to the country’s major exporters. That was its highest close since March 27.
Incoming Prime Minister Shinzo Abe has put pressure on the Bank of Japan to raise its inflation target from 1 to 2 per cent to extricate the country from two decades of deflation — continually dropping prices — which has deadened economic activity.
Abe named a new Cabinet on Wednesday, following the resignation of Prime Minister Yoshihiko Noda’s government. Abe has urged the central bank to take steps to dampen the strength of the country’s currency. A strong yen has hobbled big exporters like Toyota by eroding the value of repatriated earnings and making Japanese products more expensive overseas.
Abe has also called for aggressive public works spending to invigorate a languid economy.
South Korea’s Kospi rose marginally to 1,982.25. Stocks in mainland China, Singapore, Indonesia and the Philippines also rose. The gains were reflective of investors with extra cash wanting to avoid missing out on an end-of-the-year rally.
“People want to get invested. In previous years, we’ve seen good rallies around the end of the year,” Hong Kong-based analyst Andrew Sullivan said in a recent interview.
Markets in Hong Kong, Australia and New Zealand were closed for holidays. Most markets in Europe reopen Thursday.
Among individual stocks, Japan’s Fujitsu Ltd. rose 4.1 per cent. Sharp Corp. soared 15.4 per cent.
Yonhap News Agency said South Korean mobile carriers fell after being fined for discriminative subsidies. SK Telecom Co., South Korea’s top mobile carrier, fell 0.6 per cent.
On Wall Street on Monday, the last day of trading before Christmas, stocks fell on concern that time is running out for lawmakers to reach a budget deal to avoid the U.S. going over the “fiscal cliff.” U.S. stock markets reopen Wednesday.
For weeks, discussions between the White House and Congress over a budget deal have been the main driver in markets. If a deal isn’t reached by the start of 2013, automatic spending cuts and tax increases worth hundreds of billions of dollars will be imposed — which many economists think could push the U.S. economy back into recession.
Benchmark oil for February delivery rose 45 cents to $89.06 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed down 5 cents to $88.61 a barrel on the Nymex on Monday.
In currencies, the euro rose to $1.207 from $1.3192 late Monday in New York. The dollar rose to 85.36 yen from 84.23 yen.