Nikkei Surges 5% as US Bank Hopes Lift Asian Markets

Japan's Nikkei Average surged 5 percent, leading a charge in Asian stocks Friday, propelled by increasing confidence in the financial sector stemming from hopes that large U.S. banks will survive without a government takeover and may even profit.

The beleaguered financial sector was given a boost by the Bank of America reporting a profitable start to the year, and a comment from the chief executive the bank should be able to ride out the recession without further help from taxpayers.

The U.S. dollar gained against the yen and the euro . But it was the Swiss franc which held centerstage, falling to a near three-month low against the euro after its biggest ever one-day drop against the single currency Thursday on news the Swiss National Bank sold francs to halt deflation, a move that left some analysts wondering if this was the first shot in a currency war for trade competitiveness. Crude oil prices surged 11 percent on the U.S. retail sales data and is trading above $46 a barrel in the morning session in Asia.

Japan's Nikkei 225 Average surged to close 5.15 percent higher on speculation the government will introduce additional stimulus measures to lift the sagging economy. Blue chip stocks including Sony and Mizuho Trust, both up 9 percent, and Honda Motor up 7.5 percent, advanced on growing expectations that authorities are preparing more steps to support the economy.

Seoul shares bucked the positive trend to close slightly lower in very volatile trade, with technology issues including LG Electronics and Hynix Semiconductor rallying, but losses by banks and crude refiners weighing on the index.

Australian shares logged their biggest one-day percentage gain in three months, up 3.4 percent, as battered financial sector stocks were boosted by upbeat comments from Bank of America's CEO.

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Hong Kong shares jumped more than 4 percent, up for the fourth day in a row, while Chinese stocks gained on a reassurance of further stimulus measures from Chinese Premier Wen Jiabao. Turnover, which fell to its lowest this year on Thursday, returned to normal after the Hong Kong Exchanges & Clearing said it would indefinitely suspend its end-of-the-session settlement auction starting March 23.

Singapore shares extended their gains, closing up 5.6 percent tracking Wall Street, with Keppel Land jumping up despite the stock being removed from the benchmark Straits Times Index. Yanlord Land, another stock which will be excluded from the broader index, also gained.

Chinese stocks closed slightly lower, underperforming regional markets, as investors fretted about mixed economic data and the likelihood of weak corporate earnings for the first quarter. In a speech marking the end of the annual session of parliament, Premier Wen Jiabao expressed confidence in an economic recovery and said China could launch new economic stimulus policies at any time. But he did not announce specific fresh steps to aid the economy. That left investors worrying about this week's economic data; money supply growth, bank loans and fixed asset investment were strong, fuelling hopes for an early economic recovery, but exports and industrial investment slumped more steeply than expected, raising doubts about the strength and sustainability of the recovery.

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