Bad debt progress boosts Tokyo

WELCOME signs that Japanese banks are finally taking firm action to tackle their woeful bad-debt problems boosted

The Nikkei 225 closed 85.46 points up at 10,661.08 as buyers pounced on bank stocks after Asahi Bank announced it was quadrupling the level of bad-debt writeoffs to 400bn yen (£2.3bn) in the current year. It will also wipe a similar amount off its equity investments to reflect plunging market values. Although this move will mean a net loss of 530bn yen in the year to the end of next March, against a previous projection of a 30 billion yen profit, Japanese bank shares bounded on hopes that other banks would follow suit.

Asahi shares soared by almost 10%, and Mizuho Holdings, the world's largest lender, gained more than 6%. The prospects of genuine reconstruction countered dismay that the government was backtracking on earlier promises over fiscal restraint and planning a second supplementary budget to boost the economy only days after Parliament rubberstamped the first pump-priming exercise.

Hong Kong's Hang Seng index eased 51.9 points to 11,173.9 as the two locally-quoted mainland mobile phone operators were hit by reports that Beijing was preparing to grant at least one new licence to a competitor.

China Mobile, in which Vodafone has 2% stake from which it recently wrote off £300m, extended its 5% tumble of late yesterday with a further 1.5% fall, and rival China Unicom followed. Other telecom groups were also on the slide. Hutchison Whampoa, which has wide global cellular investments, fell 1.5%, and leading Hong Kong telecom provider Pacific Century Cyberworks lost more than half of Tuesday's sharp gain scored on a increase in a planned bond issue.

Taiwan investors, seeing a brief window of opportunity in early-morning falls in recently strong technology stocks, moved back and reversed an initial slide in the Weighted Average which put on 77.57 points to 4533.37.

There was no rescue for South Korea's Kospi index as energy stocks fell on fears that a recovery in world oil prices would mean higher costs for power producers. The index lost 1.32 points to 615.01.

Some cherry-picking of China-related issues reversed Tuesday's falls in Singapore, but investors were still wary of taking big positions after the recent strong rally in the market, said dealers. The Straits Times index added 18.4 points to 1465.2, helped also by a continuing rally in bank stocks.

The spurning of Alcoa's advances by mining giant WMC hit resource stocks across the board in Sydney, although the All Ordinaries index overcame earlier losses to end ahead 48 at 3336.3. WMC shares plummeted by 12% and other miners fell in sympathy.

Trading in Malaysia was subdued by news of the death of the country's king and continuing worries about the economy, and the Composite index lost 3.43 points at 621.95. In Thailand, stocks continued to defy gravity as investors bet on improving earnings, and the SET index added 3.47 points to 287.31, while Indonesia's Jakarta Composite was lifted 0.98 points to 382.82 in quiet trading.

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