Efforts by G20 leaders convinced investors that policy makers were united enough to keep a risk taking rally alive Friday, pushing up Asian markets higher for a fourth day and knocking the yen to a six-month low against the Australian dollar.
The perception of global policy coordination added to a growing optimism based on sprouts of economic recovery around the world in the last month. For example, a gauge of Chinese manufacturing in March released on Thursday reflected expansion for the first time since September 2008.
Though caution reigned ahead of the latest U.S. payrolls figure due later Friday, views on the medium-term outlook improved markedly after the Group of 20 pledged $1.1 trillionin additional funds for the International Monetary Fund and to support global trade finance.
The yen took an early beating against higher yielding currencies such as the Australian and New Zealand dollars but then regained its footing. The euro was trading relatively unchanged against the yen after a choppy morning. The dollar was up a touch against the yen after earlier poking above the psychologically important 100 yen level since early November 2008. Oil futures is currently trading above $51 a barrel in the Asian session.
Japan's Nikkei 225 Average rose 0.3 percent to a three-month closing high, boosted by increasing optimism about the U.S. economy and active foreign buying of blue-chip exporters such as Sony. The yen's retreat, which at one point saw the dollar bounce above 100 yen, lifted car companies such as Toyota Motor, while domestic demand shares such as pharmaceuticals lost ground.
South Korea's KOSPI ended half a percent higher, but gains were limited as shares took a breather following their latest run of advances. Banking issues led rises, with Shinhan Financial Group climbing 4 percent, but defensive issues fell as investors grew more risk-tolerant, with KT&G shedding 3 percent.
Australian shares closed up 1.5 percent, their highest level in nearly three months, as tentative hopes the global economy may have found a bottom spurred buying of blue-chip bank and mining stocks. But shares in gold miners dropped after gold prices fell below $900 an ounce on renewed talk of gold sales by the International Monetary Fund, and reduced safe-haven demand as Wall Street rallied. Newcrest Mining dropped 7 percent.
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Hong Kong shares rose 0.2 percent, but profit taking pressure following the previous session's rally slowed the main index's advance. Among the big gainers, China Shipping Container Lines soared more than 10 percent after Goldman Sachs upgraded the stock to a buy rating, from sell, on expectations that global cargo trade will stabilize. Goldman Sachs has a target price of HK$2 on the stock.
Singapore's Straits Times Index reversed losses and gained 1 percent. Oil rig builders such as Keppel Corp and Sembcorp Marine advanced after oil prices jumped nearly 9 percent overnight.
China's Shanghai Composite Index fell 0.2 percent despite strong economic data as investors took profits on big gains over the past several weeks. China's official Purchasing Managers' Index for March rose to 52.4 from 49.0 in February, marking its first time in expansionary territory since last September.