Japan's Nikkei average rose 5.2 per cent today, its biggest one-day gain in over 3 months as Canon and other exporters surged after data showed US retail sales stabilising and Bank of America reported a return to profit.
Banks such as Mitsubishi UFJ Financial Group also made robust gains and the benchmark climbed 5.5 per cent on the week, its largest weekly advance since late November.
Market analysts said the danger of the Nikkei falling to a 26-year low below 7,000 appeared to have receded for now, although it was too soon to say the market has really turned the corner for a sustained uptrend.
The benchmark Nikkei gained 371.03 points to 7,569.28 in active trade, marking its biggest one-day percentage gain since December 15th. The broader Topix rose 3.3 per cent to 724.30, a day after posting its lowest close in 25 years.
Bank of America yesterday provided the week's latest reassurance from the fragile US banking sector.
It joined Citigroup and JP Morgan Chase & Co in saying it had made a profit so far this year, adding that it should be able to ride out the recession without any additional help from taxpayers.
The market largely brushed aside news that Japanese finance minister Kaoru Yosano backed a US call for governments to pump more money into their economies, ahead of a meeting of G20 finance ministers in Britain.
The Nikkei business daily reported that the Japanese government plans to expand the scope of a state-stock buying entity to include exchange-traded funds (ETFs). Most analysts said that while the report had little impact on Friday's trade, it was supportive for the market.
Canon shot up 8.6 per cent to 2,475 yen, while industrial robot maker Fanuc Ltd surged 10 per cent to 6,160 yen. Honda Motor Co climbed 7.5 per cent to 2,220 yen.
Mitsubishi UFJ Financial Group climbed 5.8 per cent to 419 yen. Mizuho Financial Group climbed 4.7 per cent to 179 yen and Sumitomo Mitsui Financial Group advanced 6.3 per cent to 2,850 yen.
Seiko Epson Corp gained 8.5 per cent to 1,212 yen after Sony said it would start talks with Seiko Epson on an alliance in small-sized LCDs, including a possible purchase of some of Seiko Epson's display assets, in a move to strengthen its LCD operations.
Sony shares advanced 9.1 per cent to 1,893 yen.
But All Nippon Airways Co fell 1.1 per cent to 366 yen after Credit Suisse cut its rating on Japan's second-largest airline to "underperform" from "neutral" because it believes the stock is overvalued.
Trade was active on the Tokyo exchange's first section, with 2.8 billion shares changing hands, compared with last week's daily average of 2 billion.
Advancing stocks outpaced declining ones by more than 3 to 1.
Reuters