Asian stocks up as Tokyo gets GDP boost

HONG KONG—Asian stocks put on solid gains on Monday, with Tokyo getting a boost from better-than-expected GDP figures that showed the country is on the road to recovery after its devastating tsunami.

Asia followed a positive end to Wall Street’s week with green screens all over the region giving dealers hope after a turbulent few days during which they were battered by eurozone debt fears and a US credit downgrade.

Tokyo closed 1.37 percent, or 122.69 points, higher at 9,086.41 and Sydney jumped 2.64 percent, or 110.3 points, to 4,282.9.

Hong Kong rocketed 3.26 percent, or 640.09 points, to 20,260.10 and Shanghai was 1.30 percent, or 33.60 points, to the better at 2,626.77.

Seoul was closed for a public holiday.

In New York on Friday the Dow Jones Industrial Average finished up 1.13 percent, at 11,269.02, taking its net loss over a very volatile week to just 1.53 percent.

Global markets had been roiled after the head of the European Commission said the eurozone debt crisis had likely spread from the peripheral states.

Then ratings agency Standard & Poor’s downgraded the United States’ credit rating, sending traders into a panic and stoking fears the world’s number one economy was heading for a double-dip recession.

The US Federal Reserve on Tuesday moved to stem the selling by assuring investors that it would not raise interest rates for at least the next two years. Stocks see-sawed, with traders grasping at short-term leads.

But the week started strongly in Asia, with dealers in Tokyo taking heart from figures showing the economy shrank an annualized 1.3 percent in the April-June quarter following the March 11 quake and tsunami.

The markets had been expecting a 2.7-percent contraction.

Post-disaster falls in consumer spending and in April exports were the main causes of the third straight quarterly contraction, analysts said.

But other recent data have started to show signs of recovery in the world’s third-biggest economy, as industrial supply chains have been restored and post-quake reconstruction has picked up along the tsunami-hit coast.

“I think we will see clear signs of recovery in the July-September quarter,” said Taro Saito, a senior economist at NLI Research Institute.

Japan’s triple calamity five months ago killed more than 20,000 people, devastated large areas of the northeast and sparked a nuclear crisis at the Fukushima plant, which continues to leak radiation into the environment.

The disaster also caused power shortfalls that have forced a summer electricity saving campaign. Only 15 of Japan’s 54 nuclear reactors are now operating, with more due to cease operations soon for regular checks.

Japan’s Cabinet Office last Friday cut its economic growth forecast for this fiscal year to 0.5 percent, from 1.5 percent, but said it expects growth to recover to between 2.7 and 2.9 percent in fiscal year 2012.

But the positive figures could be tempered by the stubbornly strong yen, which crimps the earnings of exporters – a key driver of the economy – and appears all but immune to the sabre-rattling of the Japanese government.

Tokyo intervened in currency markets earlier this month and has repeatedly made thinly veiled threats to do so again in a bid to stem the unit’s rise, but dealers continue to flee to the safe-haven yen.

On Monday the dollar recovered slightly to 76.83 yen in afternoon trade, compared with 76.76 yen late Friday in New York.

The euro firmed to $1.4295 from $1.4250, and to 109.86 yen from 109.30 yen.

“Market players are bracing for the dollar to fall further to the mid-76 yen range while closely watching for the risk of intervention,” said Nobuyoshi Kuroiwa, senior deputy general manager of Hachijuni Bank’s forex team.

Gold, another safe haven in unpredictable times, closed in Hong Kong at $1,744-$1,745 an ounce, down from its Friday close of $1,758-$1,759. The precious metal had surged early Thursday to a record above $1,800.

Oil was flat as regional stock gains were offset by the spectre of an uncertain economic future.

New York’s main contract, West Texas Intermediate crude for delivery in September, was up one cent to $85.39 a barrel in afternoon trade.

Brent North Sea crude for September advanced 11 cents to $108.14.

In other markets:

— Manila closed 0.25 percent, or 10.90 points, higher at 4,332.63.

Among the day’s gainers were Lepanto Mining, which added 3.4 percent to 1.51 pesos and conglomerate San Miguel Corp. which also rose 3.4 percent to 126.50 pesos after reporting a 72 percent jump in net profit in the first half.

— Taiwan rose 2.39 percent, or 182.37 points, to 7,819.39.

Taiwan Semiconductor Manufacturing Co. gained 2.61 percent to Tw$66.80 while leading food maker Uni-President Enterprise was 5.24 percent higher at Tw$44.20.

— Wellington closed up 1.12 percent, or 36.13 points at 3,252.63.

Fletcher Building rose 1.1 percent to NZ$7.70, Telecom Corp surged 3.9 percent to NZ$2.545 and Air New Zealand slipped 0.9 percent to NZ$1.11.

— Singapore rose 0.84 percent, or 23.81 points, to 2,874.40.

Singapore Telecom closed 0.66 percent higher to Sg$3.04 and DBS Bank was up 2.11 percent to Sg$14.05.

— Kuala Lumpur ended up 1.08 percent, or 16.07 points, to close at 1,499.74.

Budget carrier AirAsia gained 6.38 percent to 3.67 ringgit, while national flag carrier Malaysia Airlines increased 1.6 percent to 1.90. Hap Seng Consolidated lost 0.76 percent to 1.30 ringgit.

–Jakarta rose 1.79 percent, or 69.49 points, to 3,960.02.

Bank Negara gained three percent to 4,325 rupiah, Bank Danamon added 2.8 percent to 5,500 rupiah, while car maker Astra rose 4.2 percent to 70,000 rupiah.

— Bangkok rose 2.28 percent, or 24.25 points, to 1,086.32.

PTT gained 12 baht to 327, while Banpu added 10 baht to 684.

Mumbai was closed for a public holiday.