Asia stocks up, Japanese stocks six-month high

HONG KONG: Asian stock markets shot higher Wednesday after an upbeat reading of American consumer sentiment spurred more hopes of a rapid turnaround in the global economy.

Japanese stocks rose toward six-month highs Wednesday as signs the global recession is easing spread Wall Street's optimism to Asia.

The benchmark Nikkei 225 stock average rose 127.96 points, or 1.4 percent, to 9,438.77.

The broader Topix index gained 1 percent to 892.85.

The Nikkei has gained 11 percent in the last month and is up by more than a third since mid-March.

The rise followed a bullish Tuesday in New York, where the Dow Jones industrials jumped 2.4 percent after new data showed that consumer sentiment rose in May to the highest level since September.

Spending by individuals makes up more than two-thirds of U.S. economic activity, and is closely watched by major Japanese exporters whose fortunes are closely tied to the American consumer.

Investors also cheered Japan's April trade numbers, which offered more evidence that the worst of the recession may be over.

Exports in April fell 39.1 percent from a year earlier, slowing from the 45.6 percent decline posted in March, the Ministry of Finance said.

The improvement in exports, which likely bottomed in February, will be "both sustainable and profitable," said Kyohei Morita, chief Japan economist at Barclays Capital in Tokyo.

Financial issues, shipping lines and precision equipment makers led Wednesday's gains.

Nomura Holdings Inc., Japan's biggest securities firm, soared 4.7 percent to 719 yen, while smaller rival Daiwa Securities Group Inc. shot up 3.7 percent to 610 yen.

Camera maker Nikon Corp. jumped 3.5 percent to 1,396 yen after the company said Tuesday it will cut 1,000 jobs worldwide by March 2010 to try to save 8 billion yen ($84 million) in annual costs.

In currencies, the dollar bought 95.18 yen from 95.26 yen. The euro stood at $1.3953 from $1.3996.

In other parts of Asia, before the markets closed, the swing higher lifted most industries and markets, with Hong Kong shares up nearly 5 percent, following days of jittery trade amid concerns about the economy, debt ratings of Western countries and North Korea's nuclear test.

The dollar strengthened against the yen, while oil prices hovered above $62 a barrel.

Still, traders cautioned the market was being largely driven by hot money and starting to value equities far above what companies can actually earn unless worldwide economic activity picks up dramatically in the coming months.

"The recovery that we have seen in the market so far has surpassed expectations and it remains to be seen if this trend will continue," said John Mar, co-head of sales trading, Daiwa Securities SMBC Co. in Hong Kong.

"Finding investment ideas with lucrative upside is becoming far more difficult by the day. Current valuations are reflecting a very rapid global economic recovery and that seems unlikely," he said.

In early trade Hong Kong's Hang Seng surged 799.89, or 4.7 percent, to 17,791.45, while South Korea's Kospi - overshadowed by North Korea's increasingly aggressive posture - slipped 0.2 percent to 1,368.75.

Shanghai's index added 1.4 percent, Australia's benchmark was up 0.6 percent, Taiwan's stock measure gained 3.5 percent, and Singapore's index added 2.2 percent.

Overnight in the U.S., the Dow rose 196.17, or 2.4 percent, to 8,473.49.

The S&P 500 index rose 23.33, or 2.6 percent, to 910.33, and the Nasdaq rose 58.42, or 3.5 percent, to 1,750.43.

Stock futures pointed to a mixed open Wednesday on Wall Street.

Dow futures fell 17, or 0.2 percent, to 8,444 while S&P futures rose 0.6, or 0.1 percent, to 909.30.

Oil prices were steady in Asian trade, with benchmark crude for July delivery up 2 cents to $62.47 a barrel.

On Tuesday, the contract rose 78 cents to settle at $62.45. - AP

For Another perspective from The Daily Yomiuri, a partner of Asia News Network, click here

Latest NYSE, NASDAQ and other business news, from AP-Wire