Tokyo closes higher on banking surge


Japanese big banks such as Mizuho soared after the central bank said it would buy stocks directly from financial institutions

TOKYO, Japan (CNN) -- Japanese banks led Tokyo's stock market to a strong close Thursday, a day after the Bank of Japan's surprise decision to buy shares directly from financial institutions.

UFJ Holdings and Mizuho Holdings did best of the big four banks, with both jumping almost 15 percent.

After an early surge that took the market more than 3 percent higher by midday, the Nikkei 225 average closed up 2.09 percent at 9669.62. The broader, capital-weighted Topix rose 1.66 percent to 943.16.

Sumitomo Mitsui Banking Corp put on 13.5 percent and Mitsubishi Tokyo Financial Group added a more modest 6.1 percent.

Among other markets in the region, South Korea and Taiwan recovered just a little of the ground lost a day earlier.

Seoul's Kospi squeezed out a 0.04 percent gain to 704.12 and Taiwan's Taiex added 0.19 percent to 4491.31 after running up more than 1 percent earlier in the day.

Hong Kong, Australia and New Zealand all continued to decline, with Australia dipping almost 1 percent.

Singapore's Straits Times index is flat, trending down heading towards the close.

Wall Street down

The moves in Asia came as Wall Street endured another fall Wednesday, with stocks sagging to six-week lows on bleak forecasts from No. 2 U.S. bank J.P. Morgan Chase and software maker Oracle.

The Dow Jones industrial average fell 0.43 percent to 8172.45 and the Nasdaq Composite Index lost 0.62 percent to 1252.13. (Full story)

Japan was the key focus in Asia for investors, buoyed by the central bank's shock move late Wednesday, when in the last few minutes of trade, it said it would buy stocks directly from banks. (Full story)

Analysts say the BOJ's move is designed to avert a financial crisis before the end of the fiscal first half on September 30 and to ease banks' vulnerability to market volatility.

Prime Minister Junichiro Koizumi pledged in a speech Thursday to work with the BOJ to stop the banking sector's problems from turning into a full-scale crisis. (Full story)

Telcos, automakers higher


Japanese automakers closed higher, with Honda up 3.5 percent

Tokyo's gains were broad-based. Telco giant NTT was up 1.6 percent, its mobile subsidiary NTT DoCoMo added 1.35 percent, and rival KDDI put on 1.4 percent after early gains of as much as 6 percent.

The auto sector also got a massive boost from the BOJ announcement, with Toyota Motor up 5.4 percent to 3300 yen, Honda Motor 3.5 percent higher to 5250 yen and Mitsubishi Motors up 3 percent.

Nissan, which unveiled a China deal Thursday, dipped 2.2 percent to 926 yen.

Nintendo, another stock held by banks, rose 0.67 percent on hopes it too will benefit from an easing of selling pressure.

The yen showed little reaction to the Nikkei's surge, with the dollar trading at 121.70 late in Asia's day.

Oil prices unchanged

Oil prices were virtually unchanged at $29.50 a barrel for NYMEX crude, as OPEC ministers met in Osaka to discuss output for the fourth quarter. OPEC agreed to maintain official output at 21.7 million barrels a day. (Full story)

In Seoul, the flat market meant any gains were of half a percent or less. Market heavyweight Samsung Electronics did best of the bluechips, up 0.6 percent to 335,000 won.

Big steelmaker Posco dipped 0.84 percent to 118,000 won.

Australia's S&P/ASX200 lost 0.95 percent to 3090.7, despite a positive economic appraisal delivered by the International Monetary Fund.

News Corp was virtually the only bluechip in the black, up just 0.4 percent to A$9.73.

Big resources groups BHP Billiton and Rio Tinto lost 2 percent and 1 percent respectively, while the big four banks turned in a mixed performance.

One of the biggest decliners was the insurer and funds manager AMP, off 7.7 percent to a record low of A$11.84, on concerns about its U.K. operations.

Volatile Taiex


Stocks in the Australian and New Zealand markets continued to decline Thursday

In Taiwan, the volatile Taiex grabbed back a fraction of the ground it lost Wednesday when chip foundries TSMC and UMC took a heavy battering.

TSMC, the market's biggest stock, closed unchanged at T$45.60, while smaller rival UMC dipped another 1.2 percent to T$25.00. Far East Textile added 2.7 percent to T$11.40.

Singapore's bluechips are mostly unchanged, save for Singapore Airlines, up almost 3 percent.

Hong Kong had a mixed day, with the Hang Seng index off half a percent to 9427.79.

Airline Cathay Pacific rose 2.35 percent. Big bank HSBC lost 0.88 percent to HK$84.50. China Mobile dipped 1.86 percent to HK$18.50.