Asia watch

A GROWING conviction that a weaker yen is now official government policy sent

The yen was plumbing three-year lows once again on Asian foreign exchange markets. At one point it was down to 128.40 against the US dollar, after closing at 127.54 in New York. Dealers in Tokyo predict the next move could be to 129.

Indications that the government wants to see the yen even lower came from Finance Minister Masajuro Shiokawa, who urged the Bank of Japan to pump more liquidity into the banking system, which would put yet more pressure on the currency.

As investors reacted to this strong 'buy' signal for stocks in exporters, the Nikkei 225 surged more than 2% in early trading, and looked set to challenge 10,600 before profit-taking pared it back to 10,432.17, a rise of 108.82. Signs from Germany that the European economy is reviving also boosted stocks such as Sony, which added as much as 3% at one time, while Canon, which relies heavily on exports, bounced up more than 6%.

After hitting record lows on Monday, big bank stocks were given some support from the overall market recovery which will benefit their massive share portfolios, and gains extended to as much as 4%. The size of the debt problem overhanging the sector was underlined by a 6% slump in Marubeni, one of Japan's traditional trading houses, which is threatening to add one more name to the growing list of bad debtors.

A strong overnight performance on Wall Street and on the tech-heavy Nasdaq prompted some exploratory buying of technology related counters in Hong Kong, but figures released on Monday night showing that unemployment had reached a five-year high of 5.8% dampened the enthusiasm. The Hang Seng index ended ahead 21.1 at 11,486.9. With retail sales and property prices already in the doldrums, investors fear that rising unemployment will sap consumer confidence.

Taiwan share prices were shaken by an earthquake as well as continued foreign selling, which together took the Weighted Average down 126.96 points to 5329.19. Unconfirmed fears that the quake, which reached 6.7 on the Richter scale, may disrupt semiconductor production reversed strong rises in the sector, which is expect to benefit from a US recovery and rising chip prices.

South Korean stocks were unsettled by the potential damage that cheaper Japanese exports will do its own exporters, and the Kospi index drooped 8.26 points to 640.02. Signs of strength on Wall Street boosted blue-chips in Singapore, where the Straits Times index added 25.2 points to 1583.6.

Wall Street was also the driving force in Sydney, and News Corporation dominated trading with a 2% rise on hopes of a revival in the advertising revenues of its US interests. The All Ordinaries index added 84.5 points to 3320.5. Excitement in gold shares died down as investors awaited the latest assault on Normandy Mining.

Stocks in Thailand were marginally ahead, and the SET index put on 1.37 points to 294.88, boosted by financial stocks. Malaysian and Indonesian markets remained closed for public holidays.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.