Japan jolt fires Asia stocks higher

By staff and wire reports

HONG KONG, China -- Asian markets roared back on Tuesday after a dramatic slump on Monday.

The tiger in the tank was supplied by the central Bank of Japan, which made a shock move to bully along the world's second-largest economy.

That fired Japan ahead almost 4 percentage points, with almost all the region's exchanges posting gains.

Hong Kong, South Korea and Taiwan all moved up strongly.

The only signs of Asia-Pacific weakness came in Australia and New Zealand, where disappointing earnings pushed markets down.

Japan snaps four-day streak

VIDEO CNN's Dalton Tanonaka with Asian stock market close.( August 14 ) Play video (QuickTime, Real or Windows Media)

In Japan, the benchmark Nikkei index jumped 3.8 percent to close at 11,917.95.

That snapped a four-day downdraft and came a day after the index hit a 16-year closing low, at 11,439.87.

The broader Topix index climbed 2.72 percent higher to 1,198.86. That was its biggest one-day jump since May 1, when the "Koizumi" effect of a new prime minister fired optimism.

On Tuesday, the Bank of Japan made the running in a surprise move. The central bank will increase current account deposits to $49.0 billion (6 trillion yen), up from 5 trillion yen.

The BOJ will also increase its monthly buying of Japanese Government Bonds to 600 billion yen, from 400 billion yen.

Both steps give Japan's economy an extra jolt of money. With interest rates close to zero, the BOJ had come under heavy political pressure to help out more.

The main gainers were banks. Mizuho Holdings, the world's largest bank by assets, hit its daily limit, gaining 11.0 percent to 504,000 yen.

Nomura Securities Co., the nation's number-one broker, jumped 10.2 percent to 2,215 yen.

The BOJ's moves weakened the yen, which was at 122.62 in late trade.

But James Malcolm, senior economist at J.P. Morgan, told CNN the BOJ's "conservative" move wouldn't lift the pressure for long.

The central has little room to maneuver to help Japan. "There are few options left, none of which are very attractive," Malcolm said.

Beaten-down retailer Mycal Corp. leaped 33.3 percent to 120 yen. Its main creditor bank is mulling about 50 billion yen in extra loans.

Techs had already been performing well before the BOJ's move, after Nasdaq's 1.3 percent overnight lift.

Toshiba Corp -- Japan's No. 1 chip producer -- added 4.0 percent to 620 yen. Major PC and chipmaker Fujitsu Ltd. spurted 7.2 percent to 1,232 yen.

Australia, New Zealand both down

Stocks Down Under were again driven by a different beat.

Australia's benchmark S&P/ASX 200 index lost 0.4 percent to close at 3,371.9.

A host of disappointing earnings led the index down. For instance, bank backer Suncorp Metway slumping 6 percent to A$14.28.

It posted an 18 percent rise in annual profit, but that came from extraordinary gains. Profits were otherwise flat.

Mining company WMC came in with a worse-than-expected 32 percent fall in first-half profits. Its shares sagged 4.8 percent to A$7.81.

Media giant News Corp., the biggest stock trading in Sydney, slipped 1.2 percent to A$17.84.

Investors are waiting for Rupert Murdoch's company to release earnings in the United States on Thursday.

Across the Tasman Strait, New Zealand's markets were also down on earnings. But the benchmark NZSE-40 capital index almost broke even, falling just 0.01 percent to 2,050.36.

Wellington's biggest stock, Telecom New Zealand, posted a full-year net profit for 2001 that was down 18 percent.

It took a one-time charge to scrap plans for a CDMA wireless network in Australia. Without that, it narrowly beat expectations.

Investors bid the stock up during the day. But it ended up just 2 cents at NZ$5.20.

Hong Kong rallies off 28-month low

Hong Kong's Hang Seng index recovered from Monday's 28-month low close.

Asia's worst-performing index rallied 2.5 percent to 11,991.01. During the day, it broke back above the 12,000 level that had provided support before these recent lows.

Hong Kong's second-biggest stock, China Mobile, led the way with a 5.2 percent gain to HK$34.30.

China's largest cell-phone company reports earnings on Thursday.

In Seoul, the benchmark Kospi closed 2.7 percent higher at 577.15. That's a five-week high.

South Korea's largest stock, world memory chip No. 1 Samsung Electronics, rose 3.1 percent rise to 197,500 won.

Nasdaq's gains also helped Samsung's troubled rival, Hynix Semiconductor. The chipmaker rose 11.0 percent.

South Korean banks were pushing ahead with reforms, pulling funding from 49 companies they say are unviable. They didn't identify the companies, thought to be small Korean entities, fearing that would hasten their demise.

In Taiwan, the main TAIEX gained 1.52 percent to 4,589.60. Nasdaq was pushing along the chip-driven market, which has also gained recently from a loosening of trade restrictions with mainland China.

The market's largest stock, world contract chip No. 1 Taiwan Semiconductor Manufacturing, rose 1.5 percent to T$69.

China Airlines, Taiwan's largest airline, was up the daily limit at T$16.40. Investors are hoping direct flights to China are in the offing. Taiwanese businessmen now have to fly indirect, normally via Hong Kong.

Singapore's Straits Times index was up 1.3 percent in late afternoon trade, at 1,647.09.

In India, Mumbai's main index was trading up 1.3 percent at 3,331.65 in the early afternoon.

Reuters contributed to this report.