Japan's Nikkei jumped 3.4 per cent today to post its highest close in seven weeks, with banks including MUFG jumping on optimism about US plans to help a strained financial system, while a weaker yen helped exporters.
The United States today offered generous financing for private investors to help cleanse banks of up to $1 trillion in toxic assets that are blocking lending and worsening a deep US recession.
The news encouraged investors to take more risks, igniting a broad-based rally in Tokyo stocks.
The benchmark Nikkei gained 269.57 points to 8,215.53, its highest close since January 29th.
The broader Topix added 3.5 per cent to 791.56, its highest finish since February 4th.
Hopes for the US plan boosted US stock futures by nearly 2 per cent.
Shares of Mitsubishi UFJ Financial Group (MUFG), Japan's biggest bank, jumped 4.7 percent to 512 yen. It said today it planned to close 50 branches and cut 1,000 jobs to continue slimming down its operations since its 2005 merger, as a tumbling stock market depletes its earnings.
No.2 Mizuho Financial Group gained 5.3 per cent to 220 yen and third-ranked Sumitomo Mitsui Financial Group shot up 7.3 per cent to 3,800 yen.
Japanese energy-linked shares such as trading firm Mitsubishi jumped after oil prices rose more than 1 per cent towards $53 a barrel on expectations that the US Treasury's efforts to stabilise the ailing financial system could speed up a recovery in the US economy.
Mitsubishi rose 7.7 per cent to 1,323 yen.
Oil and gas field developer Inpex climbed 6.7 per cent to 730,000 yen.
Exporters gained as the dollar was trading around 96.15 yen, after falling as far as 93.55 on Thursday. Investors welcome a weaker yen as it boosts exporters' profits when repatriated.
Electronics parts maker Kyocera added 3.8 per cent to 6,820 yen.
Reuters