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Japan Closes Up 4%, Markets Hope Worst is Over

Markets surged Wednesday after a Lehman Brothers securities offering in the U.S. met strong demand, raising hopes in Asia that the worst of the credit crisis might be over. Japan closed over 4 percent higher, while Australia and South Korea both added 2 percent.

A $19 billion writedown by Swiss bank UBS reinforced the view that the banks were aggressively scrubbing their books clean of soured investments tied to the U.S. housing market. The change of mood boosted the U.S. dollar, which in turned pushed oil back down towards $100 a barrel. The greenback held on to its gains in early Asian trade.

Financials rallied across the region. Citibank's Tokyo listing finished up almost 14 percent. Australia's Macquarie Group, and South Korea's Kookmin Bank added 10 percent. Hong Kong listed HSBC Holdings and Industrial and Commercial Bank of China were trading sharply higher.

Tokyo's Nikkei 225 Average surged 4.2 percent to its highest close in a month as Mizuho Financial Group saw its greatest daily gain -- up 10 percent -- since January, with credit fears easing after the capital boost by Lehman Brothers. Exporters climbed, with Honda Motor gaining more than 7 percent as the dollar surged to above 102 yen.

South Korea's KOSPI charged ahead 2.4 percent to its highest close since Jan 15, as credit worries eased, boosting investor appetite for much beaten down banking shares. Hana Financial led the surge in banking shares, soaring 11.3 percent, its highest in more than two months. Woori Finance Holdings jumped 8.38 percent, and Shinhan Financial Group rose 6 percent.

Australia's S&P/ASX 200 Index ended up 2.6 percent -- its highest in a month, as financials such as Babcock & Brown rallied. But gold miners fell after bullion prices fell to a two-month low on Tuesday. Gold came off as gains in the U.S. dollar dimmed the safe haven appeal of the precious metal. Newcrest Mining, Sino Gold Mining and Lihir Gold all declined.

Hong Kong stocks soared over 3 percent, adding more than 700 points, in a broad rally with financials such as Bank of Communications and telcos such as China Mobile taking the lead. Refiners and airlines leapt as oil prices stayed off highs, despite rising above $101 a barrel, snapping three-straight days of losses triggered by dollar gains and easing supply concerns in Iraq. Sinopec, Asia's top refiner, soared over 6 percent.

Singapore's Straits Times Index rose 2.6 percent, led by gains in financials such as top bank DBS Group. Wilmar International rose nearly 5 percent after the plantation firm said it has won approval from Chinese authorities to increase prices of its cooking oil products.

China's Shanghai Composite Index closed 0.6 percent higher on the back of strength in overseas markets and an expression of support for the Chinese market by the cabinet. Ping An Insurance, which had plunged almost two-thirds from its peak, partly because of its multi-billion dollar fund-raising plan, soared over 9 percent.