Asian stocks gained ground and Tokyo reversed course on Tuesday afternoon, as worries eased over Dubai's debt problems. The Nikkei 225 closed 2.4 percent higher, driven by news of a surprise BOJ meeting, which weighed on the yen and lifted exporters.
Wall Street's modest climb overnight offered some support. The Dow Jones Industrial Average rose 34.92, or 0.3 percent, to close at 10,344.84. The S&P 500 gained 0.4 percent and the Nasdaq added 0.3 percent. Investors are keeping a cautious eye on U.S. holiday spending. Some early holiday numbers from the National Retail Federation showed that, while there were more shoppers this year, they spent less.
Japanese stocks recouped early losses to rally 2.4 percent, as exporters gained after the yen fell on expectations the Bank of Japan may consider further steps to ease monetary policy in an extraordinary meeting today.
The Nikkei 225 Average jumped 226.6 points to 9572.2. The broader Topix gained 2.12 percent to end at 857.7 points. Stocks such as Canon rose 1.5 percent after declining 2.7 percent.
Bank stocks also turned higher. Mitsubishi UFJ Financial Group advanced 2 percent after slipping earlier on news it will raise up to 1.056 trillion yen ($12.24 billion) in what would be the biggest-ever share sale by a Japanese financial institution.
Mizuho Financial rose 1.85 percent, and Sumitomo Mitsui Financial rose 0.8 percent after losing 3.5 percent.
Shipping firms remained under pressure but trimmed losses by afternoon trade after a key sea freight index fell to its lowest since November 11. Nippon Yusen lost 1.1 after dropping 4.8 percent earlier, while Mitsui O.S.K. Lines declined 1.8 percent.
Shares of Mitsui Matsushima dived 15 percent after the trading firm, whose main operations include selling coal, said on Monday it would raise up to 5.1 billion yen ($59.13 million) through a public share offering.
All eyes are on the Bank of Japan's emergency policy meeting at 0500 GMT. Japan's finance minister said on Tuesday that he was open to a return to quantitative easing to help get the country out of deflation.
The Korea Composite Stock Price Index or Kospi finished up 0.9 percent, led by strong gains in LG Display on hopes that LCD panel prices will rebound.
Seoul shares had drifted in and out of positive territory, with shares losing 0.9 percent briefly on unfounded rumors that North Korean leader Kim Jong Il had died.
Shares in LG Display rallied 4.6 percent on a solid outlook for the remainder of this year and the first half of 2010, supported by strong liquid crystal display (LCD) TV sales.
Bank stocks continued to recover from big falls last week. KB Financial advanced 1.7 percent and Shinhan Financial rose 0.22 percent.
But shipbuilders and energy issues dragged on the market. Daewoo Shipbuilding & Marine Engineering fell 2 percent and STX Offshore & Shipbuilding lost 1.3 percent, pressured by losses in the Baltic Dry Index, which tracks the cost of shipping key commodities.
SK Energy, South Korea's top crude refiner, declined 2.29 percent and GS Holdings, holding company of the country's No.2 crude refiner, lost 0.95 percent.
Australian stocks closed 0.4 percent higher, after the central bank raised interest rates by 25 basis points to 3.75 percent as expected, saying its third straight month of rate hike will help sustain economic growth.
Qantas Airways jumped 3.85 percent to A$2.70. The flag carrier said that passenger numbers rose 6.7 percent in October from a year earlier with revenue per passenger kilometre up 3.2
Developer Lend Lease surged 7.5 percent to A$9.76 after it won a contract to run a 1.5 billion pound ($2.47 billion) redevelopment project in London.
M&A news lifted shares of Indophil Resources. The Australian miner jumped 10 percent after China's largest gold company, Zijin Mining, made a A$545 million ($498 million) friendly takeover bid for Indophil.
Shares fell in early trade as banks gave up a bit of Monday's big gains, but Commonwealth Bank of Australia, the biggest bank by market value, jumped 1.9 percent and helped turn
the market around.
The S&P/ASX 200 index stood 17 points higher at 4,719.
New Zealand's benchmark NZX 50 index followed Wall Street higher, rising 0.6 percent to 3,146.6 points.
Taiwan stocks ended the session 0.88 percent higher, led by technology shares including LCD maker AU Optronics on hopes of rising demand for PCs and flat-screen TVs next year.
The key TAIEX share index climbed 67.02 points at 7,649.23, extending the previous session's 1.22 percent rise.
AU Optronics, the world's No.3 flat-panel maker, advanced 3.78 percent, with the broader optoelectronics sub-index rose 2.34 percent.
Shares in Taiwan Cement jumped 3.2 percent after its Hong Kong unit agreed to
pay HK$4 billion for Prosperity Minerals Holding's facilities in China.
Hong Kong's benchmark Hang Seng Index reversed earlier weakness to close 1.3 percent higher, after posting its biggest single-day percentage gain in more than four-months Monday.
HSBC rose 1 percent, adding to Monday's 4.25 percent advance.
Shares of Zijin Mining Group surged 7 percent at one point to HK$8.70 after China's largest listed gold company offered A$545 million ($498 million) for Australian miner Indophil Resources.
China's Shanghai Composite Index tagged on 1.3 percent to Monday's sharp gains to stand at 3227.47 points in afternoon trade.
In Southeast Asia, markets in Singapore and Malaysia pushed higher. The benchmark Straits Times Index rose 1 percent to 2,760.2 points. Investors took their cue from a firmer Wall Street as worries over Dubai's debt problems eased.
The KLCI climbed 0.6 percent to 1,266.7 points as bargain-hunters emerged after Monday's selldown in a delayed reaction to the Dubai situation. Construction, property and finance stocks led the way.
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