By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Japanese stocks ended at a fresh
multiyear high Wednesday after the country's central bank raised
its economic outlook, even as it left other elements of the
monetary policy unchanged.
Australian and Hong Kong shares reversed early gains in choppy
trade amid caution ahead of Fed Chairman Ben Bernanke's testimony
before Congress later in the day.
"Any insight gained from Bernanke's address could have a
significant bearing on all markets globally," said CMC Markets
analyst William Leys.
Japan's Nikkei Stock Average climbed 1.6% to end at its highest
level since December 2007. The benchmark extended gains after Bank
of Japan's policy decision. The broader Topix added 0.4%, well off
the day's highs.
Elsewhere in Asia, South Korea's Kospi gained 0.6% and Taiwan's
Taiex added 0.2%.
On the downside, Australia's S&P/ASX 200 declined 0.3% and
China's Shanghai Composite slipped 0.1%, after struggling to hold
gains recorded earlier in the day.
The Hang Seng Index lost 0.5% in a shortened session, after the
morning trading session was canceled due to a rain storm in Hong
Kong.
Most regional markets found support as key U.S. equity indexes
ended at record levels Tuesday, after comments from New York
Federal Reserve President William Dudley and St. Louis Fed
President James Bullard were interpreted as suggesting the central
bank wasn't about to taper off its bond-purchase program.
"If there is any hint of a wind-down in the near term, we could
see the U.S. dollar continue to strengthen at the expense of its
currency counterparts, as well as commodities. Alternatively,
renewed commitment to the program may curtail the recent trend of
[dollar] favor," said CMC Markets' Leys.
Among the major stock movers in Tokyo, shares of Canon Inc.
(CAJ) added 2.2%, Panasonic Corp. (PCRFY) rose 2%, and Daikin
Industries Ltd. (DKILY) advanced 2.2%.
"While the deep pockets of value are no longer there, Japanese
equities present investors with attractive opportunities both at
the 'distressed' end of the market, as well as at the 'quality'
end," Deutsche Bank analysts wrote in a report issued Tuesday.
"A prolonged period of yen strength forced companies into
restructuring, given the export-driven nature of the market.
Together with the high operational leverage, this will produce
strong earnings revisions in the coming 12 months," Deutsche Bank
said in its report.
Japanese stocks are the best performing among the major global
share markets so far in 2013, with the Nikkei Stock Average up more
than 50% from last year's closing level.
Shares of Mitsubishi Motors Corp. (MMTOY), which had jumped more
than 10% earlier on Wednesday, after leaping 34% in the previous
session, reversed course as investors locked in profits. The stock
ended 6.6% lower.
Sony Corp. (SNE) soared 5.9%. The gains followed a similar surge
for its American Depository Receipts in U.S. after-hours trading,
after rival Microsoft Corp. (MSFT) unveiled its Xbox One gaming
console. Also read: Translation error boosts Sony stock.
Meanwhile, official Japanese data released earlier in the day
showed the country's trade deficit widened sharply in April, as
exports grew at a slower-than-expected 3.8% from the year-ago
period, while imports jumped 9.4%.
Stocks in Hong Kong suffered a drag from a 1.1% drop for HSBC
Holdings PLC (HBC), as the heavyweight bank began to trade without
rights to its dividend.
Shares of China Galaxy Securities Co. rose 6% on their debut,
ending at 5.62 Hong Kong dollars (72 U.S. cents), compared with the
initial public offering at HK$5.30 (USDHKD).
In Sydney trading, high dividend-yielding stocks such as banks
remained under pressure, although the big diversified miners
advanced to provide some support in the wake of strong cues from
the U.S.
Westpac Banking Corp. (WBK) dropped 0.9% and National Australia
Bank Ltd. (NABZY) fell 1.2%. In the resources sector, BHP Billiton
Ltd. (BHP) climbed 1.3%, and Rio Tinto Ltd. (RIO) gained 1.8%.
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