Asian Markets Rally to 6-Month High, Yen Slides

Asian shares climbed to a six-month high Monday, as hopes that the global economic downturn is nearing its bottom spur demand for riskier assets while hitting the yen and safe-haven government bonds.

Economic recovery hopes lifted oil prices above $53 a barrel, while Japanese bonds fell, sending the benchmark 10-year yields to a 4-½ month high and the yen slid towards six-month lows against the dollar and the euro. The dollar rose as high as 100.93 yen. The euro climbed against the yen. However, the dollar lost some ground against other currencies, with a gauge of its performance against six major currencies down 0.5 percent, as investors were switching to higher-yielding currencies.

North Korea's launch of a rocket on Sunday had little market impact, given that the action had been expected and is seen having limited economic implications.

Japan's Nikkei 225 Average rose 1.2 percent to a three-month closing high, as hopes grew that the worst may be over for the U.S. economy and exporters like Panasonic gained on a weaker yen.

South Korea's KOSPI closed of its highs, up 1.1 percent, as investors shrugged off North Korea's launch of a long-range rocket, with gains led by technology and banking issues including Hynix Semiconductor and Woori Finance Holdings.

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Australian stocks rose 0.6 percent, adding to last week's gains, amid optimism that a slump in the global economy could end soon, with banks pacing gains and offsetting falls in resources firms.

Hong Kong shares jumped 3.1 percent, with property stocks in the limelight on signs of an early recovery in a sector which has been among the worst hit by recession. Shares in Sun Hung Kai Properties gained 3.6 percent. Shares of HSBC jumped more than 5.3 percent to five-week highs after its massive rights issue received a robust response from investors.

Singapore's Straits Times Index climbed 1.4 percent. Banking shares were leading the advance with United Overseas Bank up 2.1 percent and DBS Group up 1.2 percent.

Markets in Thailand, China and the Philippines are closed for holidays.