Weaker yen boosts Japanese exporters

Asian stocks surged back after Friday’s heavy losses to record their best daily performance in nearly three months as global risk appetite was lifted by improved prospects for a Greek debt deal and by benign US inflation data that calmed fears of higher interest rates.

Local factors also provided a boost with Hong Kong buoyed by successful land auctions and Tokyo’s exporters by a weaker yen.

Commodities stocks also benefited from rising metals prices.

The Shanghai market had its first chance after the new year holiday to react to the central bank move to raise the bank reserve ratio – Monday’s losses for China stocks were much less than had been feared.

The FTSE Asia-Pacific index advanced 2.5 per cent to 225.48, its best day since November 30 and more than recovering Friday’s 2 per cent fall.

“Asian markets at these levels are quite cheap and there [will be reasonably] good growth in the region over the next one or two years, so we think these are buying levels,” said Khiem Do, of Baring Asset Management.

Tokyo was the region’s leading beneficiary of Monday’s positive sentiment with the Nikkei 225 Average having its best day for 11 weeks, climbing 2.7 per cent to 10,400.47, a three-week closing high.

The US CPI data lifted Japanese exporters as investors reckoned policymakers’ focus would remain on growth rather than fighting inflation.

Sony ,?which makes nearly a quarter of its sales in the US, gained 3.4 per cent to Y3,200 while Canon , which earns 28 per cent of its revenues in the Americas, rose 3.9 per cent to Y3,850.

The biggest gainer on the Nikkei was Hino Motors , the maker of heavy duty trucks, which jumped 5.8 per cent to Y345 with Morgan Stanley raising its price target from Y350 to Y390.

Mitsui & Co , Japan’s fourth-biggest trading company by market value, joined a broad rise in commodity-related stocks as it rose 4 per cent to Y729. Nippon Mining , the country’s biggest copper producer, gained 3 per cent to Y447.

Suruga Bank jumped 7.4 per cent to Y801 after announcing a bigger share buy-back than originally planned.

In Hong Kong, the Hang Seng index had its best one-day rise in more than two months, climbing 2.4 per cent to 20,377.27 with the index of mainland shares listed in the territory, or H shares, gaining 2.3 per cent to 11,519.56.

The city’s first land auction of the year exceeded estimates and lifted real estate stocks.

Sun Hung Kai Properties , the world’s biggest developer by market value, rose 2 per cent to HK$102.10 after selling apartments worth $540m and submitting the winning bid for a site in the Tseung Kwan O district.

Cheung Kong Holdings , controlled by billionaire Li Ka-shing, rose 2.6 per cent to HK$93.95.

US Rusal enjoyed its best day since listing last month as the world’s biggest aluminium producer jumped 6.9 per cent to HK$8.02 after announcing that it planned to raise its aluminium production levels by 3 per cent this year and its alumina levels by 7 per cent.

But Parkson Retail Group fell the most in eight months, down 6.1 per cent to HK$11.18, as it reported the slowest profit growth in at least six years.

The Shanghai Composite slipped 0.5 per cent to 3,003.40 on the resumption of post-holiday trading but Taiwan’s Taiex index gained 1.6 per cent to 7,560.04 on gains for technology stocks such as Acer , up 3.7 per cent to T$90.60 on an upbeat sales forecast.