Japan's Nikkei leads Asian stocks higher

Japan's Nikkei leads Asian stock markets higher as analysts expect BOJ to come to the rescue

Associated Press
Japan's Nikkei leads Asian stocks higher
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Investors look at the stock price monitor at a private securities company Monday Aug. 12, 2013 in Shanghai, China. Slower-than-expected economic growth weighed on Japan's stock market Monday but gains were posted elsewhere in Asia following signs that China's economy may be picking up. (AP Photo)

BANGKOK (AP) -- Japan's Nikkei stock index posted solid gains Tuesday on hopes for more monetary stimulus and helped pull markets up elsewhere in Asia.

The Tokyo benchmark rose 2 percent to 13,794.59, rebounding from a moderate drop Monday sparked by weaker-than-anticipated economic growth.

Economists had expected to see more than an annualized growth rate of 2.6 percent for the April-June quarter, given the size of the Bank of Japan's stimulus program and public spending called for under "Abenomics," the aggressive program undertaken by Prime Minister Shinzo Abe to jumpstart the moribund economy.

By Tuesday, however, analysts saw the glass as half full. Disappointing data meant it was more likely that the Bank of Japan might step up its already massive government bond buying program.

The BOJ is expanding the monetary base by about 60 trillion yen ($606 billion) to 70 trillion yen ($707 billion) over two years by mopping up Japanese government bonds.

"Fading expectations of more aggressive monetary easing by the Bank of Japan have been perhaps the most important factor behind the recent partial recovery in the yen and associated weakness in the Nikkei," said analysts at Capital Economics in a market commentary.

"However, we continue to expect Japan's central bank to step up its asset purchases," Capital Economics said.

Elsewhere in Asia, Hong Kong's Hang Seng rose 0.9 percent to 22,482.62. South Korea's Kospi advanced 1.1 percent to 1,906.27. Benchmarks in Taiwan, Singapore, Indonesia and the Philippines also rose.

Australia's S&P/ASX 200 gained 0.9 percent to 5,153.20 as investors geared up for company earnings season. Mining services companies rose. Bradken Ltd. surged 10.2 percent after the engineering company said it would reduce costs and spending following a steep fall in full year profit.

Despite rising commodities prices, some Australian mining stocks fell as investors sold off shares that have enjoyed recent gains, said Stan Shamu, market strategist at IG in Melbourne, Australia. Newcrest Mining Ltd. dropped 2.2 percent a day after surging nearly 8 percent.

"We are getting a little bit of profit-taking after a pretty big run in miners," Shamu said.

On Wall Street, the Dow Jones industrial average and the Standard & Poor's 500 were stuck in a summer lull on Monday. The Nasdaq composite got a lift from Apple, which rose after a technology blog reported that the company planned to unveil the latest version of the iPhone Sept. 10. The Dow fell marginally to 15,419.68. The S&P 500 index fell 0.1 percent, to 1,689.47. The Nasdaq composite rose 0.3 percent to 3,669.95.

Benchmark crude for September delivery was up 12 cents to $106.24 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 14 cents to close at $106.11 a barrel on the Nymex on Monday.

In currencies, the euro rose to $1.3302 from $1.3292 late Monday. The dollar rose to 97.46 yen from 97.19 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

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