Asia: BoJ measures lift Japan
Date: Tuesday 01 Dec 2009 10:39
Interest rates were in focus in Asia as the Bank of Japan left its key lending rate unchanged, as expected, but the Australian central bank lifted its benchmark rate for the third month in a row, by a quarter of a point to 3.75%.
The Australian central bank’s decision was made against a background of improving economic conditions in the region, a view backed up by good news from China, where the country’s manufacturing output in November grew at its fastest pace in more than five years.
The Chinese government’s PMI, also released today, was unchanged in November.
Japanese stocks were higher on the day, led by exporters, after the Bank of Japan’s decision to hold an emergency policy meeting raised expectations that the central bank would seek to check the Japanese yen’s rise.
In the end, action by the Bank of Japan (BoJ) turned out to be targeted more at fighting deflation, as it set up a new 10 trillion yen lending facility. The BoJ expects the deflationary period to last for three years.
Car manufacturer Nissan, and mining and construction equipment maker Komatsu, both of which export heavily to the US, were wanted.
The manufacturing news from China prompted demand for Baoshan Iron & Steel.
The Nikkei 225 index jumped 226 points to 9.572.
In Hong Kong, China Eastern Airlines took flight after receiving regulatory approval to take over Shanghai Airlines.
Banking giant HSBC advanced as fears over Dubai receded.
Zijin Mining participated in the general advance after announcing an offer for Australian gold and copper miner Indophil Resources, snapping up Xstrata’s 19.9% stake in Indophil in the process. Zijin paid AU$1.28 per share for Xstrata’s stake..
The Hang Seng index advanced 291 points to 22,113.
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