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Asia Ends Mostly Higher on Bargain Hunting

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hello and a Happy Friday to all.

You're watching Asia Market Daily, co-produced by CCTV Business Channel and CNBC, first in business worldwide.

I am Saijal Patel and here are the top stories across Asia today.

We start in Japan where the yen has been retreating on reports that the central bank governor will meet the Prime Minister next week to address the yen's strength.

There's now speculation of possible intervention by the government to prevent further rises.

The yen had hit a 15 year high against the dollar on the back of a weaker economic outlook for the U.S..

The Bank of Japan confirmed it had checked forex rates on Thursday but it emphasized it had no levels in mind.

Separately, the BOJ had also released a report of its meeting in July.

It showed that some board members are concerned about the yen's advance.

They fear the currency's climb and falling stock prices may hurt the nation's economic recovery.

A higher yen cuts the value of Japanese corporates' overseas income when its converted into its home-base currency.

(SOT) Rob Rennie, Currency Strategist, Westpac Bank:

"It feels as if the Japanese authorities have done a good job in a quiet week into putting in something of a floor this 84, 80 to 85 level successfully be verbally defended. And I think the fact that they've been able to do that is probably a good sign. The fact that we've seen the dollar bouncing a bit this week, post the Fed probably takes a bit of the pressure off as well. But the one thing that still worries me out there is the fact that we're beginning to focus on softer data coming out of Europe as well. And if this does develop into another wave of concern about the outlook for the euro zone, that's something that probably makes the yen more attractive from a global point of view as well."

And now for a look at how regional markets close the trading week.

Asian stocks finally on the mend after a 3-day losing streak.

Analysts say the markets have been oversold and many took opportunity to pick up bargains.

(SOT) Fan Cheuk Wan, Head of Research Asia Pacific, Credit Suisse Private Bank:

"For our clients, we've been advising investors to position in the growth-sensitive equities as an inflation hedge. We also like commodity-related investment vehicles, recently we upgraded the material sector back to overweight because we believe the easing macro concerns after the European banks stress test should be restoring investor confidence in the growth sensitive sector."

In Japan, the weaker yen boosted exporters and helped the Nikkei 225 to rebound, closing 0.4 percent higher.

Toshiba however, bucked the trend, losing ground, despite its plan to cut cost by nearly $12 billion dollars over the next 3 years.

Meantime, South Korea's KOSPI finished 1.42 percent higher led by key technology stocks like Samsung.

Over in Australia, the benchmark index gained as farm stocks rally on surging global wheat prices.

The S&P ASX 200 closed half a percent higher.

But, Telstra, the largest phone service provider remained on the backfoot, touching a record low following yesterday's disappointing full-year results.

On the Hang Seng, Li & Fung gained after reporting record first-half profits.

(SOT) Bruce Rockowitz. President, Li & Fung:

"Very strategic deal for the company. We look at IDS their footprint, selling into Asia, where Li & Fung is very strong. Growth next 10 year, next 3 year plan and beyond, we need a compelling platform, sell into Asia. So that's what the IDS merger would do for us."

A stronger appetite for air travel helped Korea Air post a record quarterly operating profit of 325.1 billion won.

A boom in air cargo demand also boosted the bottom line.

But while KAL and its rival Asiana have been seeing a strong recovery in passenger numbers, there are some big concerns going forward.

SBS CNBC's Hyunmo Ahn reports.

South Korean airlines were not spared the headwinds over the last 2 years. From the global economic slowdown coupled with the H1N1 flu scare. But by the start of this year, they've started to spread their wings. With the economy thawing, more people are packing up and more exporters are shipping goods. The first half saw all-time high international passenger and cargo volumes.

(Translated SOT) Jung-Eun Kim, Senior Analyst, HMC Investment Securities:

"According to the July data released by the Incheon International Airport, last month was the highest ever July on record in terms of cargo shipment, for both Korean Airlines and Asiana Airlines. This is a very encouraging start of the second half that eliminates cargo-related uncertainties."

Worries that the cargo boom may be ending have pressured Korean Airline's stock. Analysts point to a more diverse cargo mix as reasons to be optimistic. Cargo also doesn't make up that big a component to airline earnings while passenger demand is expected to stay at its summer peak till at least late September, with the upcoming Chuseok holiday.

The strong projections though are attracting the attention of foreign low-cost carriers like Malaysia's AirAsia, which is starting flights from Kuala Lumpur to Korea in November. But the impact could be limited.

(Translated SOT) Hee-Do Yun, Senior Analyst, Korea Investment & Securities:

"Routes to Southeast Asian countries take up only 0.5% of their total revenue. Plus, discount airlines and major airlines have different consumer bases. If the pie is 10, only 1 or 2 will go to budget airlines, while the rest 8 or 9 will go to existing mega-carriers."

Korean Airlines and Asiana have been going the opposite direction - more premier class seats. Last year, Korean Airlines introduced its new Cosmo Suite first class, boasting 180 degree full flat seats. Asiana Airlines went one step further with fully-flat seats in their newest business class called 'Oz Quadra Smartium'.

Korea's full-service airliners are betting that differentiating themselves with premium services will be the key to fighting the competition, and not a price war.

Hyunmo Ahn, SBC-CNBC, Seoul.
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And before we go, a quick look ahead to the key issues out of India next week.

Here's CNBC-TV 18 reporter, Reema Tendulkar.

Thanks so much. The Indian markets, the corporate houses have entered into very lean phase in terms of the cues to watch out for. So a greater part of the attention will perhaps be determined by what happens in the global markets. And we're also done with the earnings season. Next week onwards, very few cues for you to look out for. Monday could be important -- we will be looking out for inflation numbers, which will be announced for the entire month of July.

Our CNBC -TV 18 poll says inflation coming in at about 10-point 63 percent. This compares with the actual figure of 10 -and-half percent we had in the month of June. We have a bit of moderation on the month-on month basis.

On Thursday, that's 19 of August, we will get the weekly inflation numbers and also an update on how the monsoon has panned out. Back to you.

Well, that wraps up today's business highlights.

I'm Saijal Patel from CNBC.

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