Asia: Stocks surge again, led by another Tokyo rally

[HONG KONG] Tokyo stocks soared again on Tuesday to lead another Asia-wide markets rally fuelled by hopes of fresh central bank stimulus and following last week's blockbuster US jobs report.

The gains extended a global advance that saw the S&P 500 on Wall Street close at a record high for the first time in 14 months.

They also suggest investor fears over Britain's shock European Union exit vote last month have been allayed by promises of central bank help.

The Nikkei index ended up 2.5 per cent, adding to the four percent surge clocked up Monday as the yen retreated against the dollar following a huge win for Japanese Prime Minister Shinzo Abe's coalition in weekend elections.

Mr Abe said Monday his government would draw up new measures, Japanese media reported, in his latest push to kickstart the torpid economy.

The package could be worth around 10 trillion yen (S$130.8 billion), according to reports, which earlier said the amount could be double that figure.

"US shares have started the week on a good note, and the risk-on (sentiment) is continuing," Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told Bloomberg News.

"It's leading to higher share prices." Talk of fresh Japanese easing measures helped push the dollar up to 103.30 yen from 102.82 yen in New York. The fall in the yen provided much-needed support for Japan's exporters after the currency surged in response to the Brexit vote as traders sought out low-risk investments.

Once again Nintendo soared, adding 12.73 per cent as its new smartphone game Pokemon GO tops gaming charts and racks up millions of buyers. The firm is up nearly 60 per cent since Thursday with billions added to its market value.

Other regional markets also climbed for a second straight session, with Hong Kong ending up 1.7 per cent in the afternoon and Shanghai closing 1.8 per cent higher.

Sydney put on 0.3 per cent, while Seoul, Singapore, Jakarta and Manila all posted healthy gains.

In early European trade London, Paris and Frankfurt each rose 0.2 per cent.

The upbeat atmosphere also lent support to the under-pressure pound, which rose to US$1.3090 from US$1.2997 as dealers breathed a sigh of relief that Britain's ruling Conservatives had a new leader to take over from David Cameron as prime minister.

Theresa May will step in on Wednesday after her only opponent for a September leadership vote quit. The news provided a little certainty for the country as it looks to untangle itself from the EU over the coming years.

"It looks like the UK political process is moving much more swiftly than had been anticipated and that's helped," Mitul Kotecha, head of Asia currency and rates strategy at Barclays in Singapore, told Bloomberg News.

Traders are preparing for the release this week of data on Chinese economic growth and trade, hoping the world's number two economy will show signs that a long-running slowdown is bottoming out.

AFP