Japan's Nikkei soared Tuesday amid fresh yen weakness following recent comments from Japanese officials, while the Australian market touched a fresh 34-month high.
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The Nikkei rose 2.6% upon returning from a holiday-extended weekend, with gains coming on the back of a weaker yen. The safe-haven currency weakened against both the U.S. dollar and the euro on Monday after prospective Bank of Japan Governor Haruhiko Kuroda reportedly said he is open to further easing this year. Still, the yen was modestly stronger Tuesday. The U.S. dollar was recently at �94.19 after rising to �94.35 late Monday from �92.69 late Friday. The euro was recently at �126.12 after rising to �126.54 late Monday from �123.89 late Friday.
Comments by U.S. Treasury Under Secretary for International Affairs Lael Brainard Monday expressing support for Japan's aggressive efforts to spur growth and end deflation also lent to yen weakness. The comments came before a meeting of the Group of 20 industrialized and developing countries to be held at the end of the week in Moscow, where Japanese officials could face some scrutiny for the yen's recent sharp decline.
"While central bank easing programs such as quantitative easing may not be specifically employed to weaken a currency, it's clear the consequence is an outcome central banks and governments are all too happy to accept," Chris Gore, currency analyst at Go Markets said in a note to clients.
"The premise of a grand stimulus offensive has seen the Yen depreciate near 25-percent against the euro since former Prime Minister Noda announced his intension to dissolve parliament, making way for current prime minister Shinzo Abe to begin his Yen assassination," Mr. Gore added.
Japanese exporters benefited from the weaker yen: Canon advanced 2.6%, Honda Motor climbed 1.1%, Sony jumped 1.2% and Toyota motor was 2.2% higher.
Nissan Motor underperformed its peers, falling 4.0% amid concerns over the auto maker's outlook after it reported a 35% on-year drop in net profit for the October-December quarter.
Renesas Electronics also underperformed, falling 8.0% after announcing that it expects to log a group net loss of �176 billion for the current fiscal year.
Australia's S&P/ASX 200 was up 0.1% at 4964.40 after touching a fresh 34-month high of 4981.5 in early trading as high-yield stocks outperformed. Telstra gained 0.7%, Amcor advanced 1.5% and QBE Insurance climbed 2.2%.
Bradken surged 10% in Sydney on a stronger-than-expected first-half earnings report, while Acrux jumped 9.0% after the U.S. allowed a patent of its underarm testosterone formulation.
Markets in South Korea were unrattled by reports of a possible nuclear test in North Korea. South Korea's Kospi was down 0.1%. The U.S. dollar was recently near a session low of 1,092.35 won, but was little changed from 1,095.70 won late Friday in Seoul. South Korean markets were shut Monday for a holiday.
Commodities were also unmoved by the North Korean reports: March Nymex crude oil futures were down 16 cents at US$96.87, while spot gold was down $2.10 at $1,646.20 per troy ounce.
"This is an expected event. Everyone knew it would be coming," said Woori Futures analyst Son Eun-jeong. "There could be some knee-jerk reactions but players won't be disturbed much and change their positions abruptly," she added.
Elsewhere in the region India's Sensex rose 0.2%, Thailand's SET Index was flat, the Philippines PSE Composite added 0.2% and Indonesia's JSX gained 0.5%.
Markets in China, Hong Kong, Malaysia, Singapore, Taiwan and Vietnam are shut for holidays.
Write to John Phillips at john.phillips@wsj.com
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