Celebration for Tokyo banks

JAPANESE bank stocks continued to rally today after government ministers called for the mobilisation of two trillion yen (£10bn) to mop up their loss-making equity holdings.

Rises were subdued compared with Thursday's scorching performance after the Bank of Japan left its monetary policy unchanged following a two-day policy meeting.

Other Asian markets slowed down ahead of the Lunar New Year holiday next week, nervous about holding on to stock while Wall Street frets about the US corporate balance sheets. After gains of up to 20% yesterday, advances among the big Japanese banks were limited to around 4% or less, still good enough to take the Nikkei 225 Average up 102.79 points to 9686.06 at the close.

Disappointment that the BoJ continued to defy government calls for moves to ease the deflationary spiral was partially offset by calls for the administration to use a specially formed fund to take the strain off the banks by mopping up some of their huge loss-making portfolios. The central bank had been expected to increase bond sales to support a government call for action to end 30 months of deflation.

Bank stocks were also underpinned by hopes that the government will produce strong policy statements over the economy this weekend at the Group of Seven meeting in Ottawa.

Hong Kong stocks scored some narrow gains on bargain-hunting, but the mood was depressed by a continuing stream of bad news on its economy. Retail sales in the key December period slumped more than 5% as fears of unemployment deterred a seasonal spending spree.

Most of the rise of 62.3 points to 10,471.98 on the Hang Seng index was accounted for by HSBC Holdings, judged to be oversold after losing almost 9% this year. The shares recovered 75 cents to HK$85.50, but property counters fell as investors dumped stock on fears that lack of demand for new residential developments will spark a debilitating price war.

Investors in South Korea were in more festive mood as the Year of the Horse approached, and picked up cyclical stocks that are expected to benefit from a widely forecast economic recovery this year. Led by major steel, motor and shipping shares, the Kospi gained 11.7 points to 739.41.

Action in Singapore was dominated by an 11% surge in the price of Inchcape Motors, requoted after being suspended on THursday after a bid by Inchcape of the UK for its outstanding stake in the company.

Singapore Telecom shares also edged up after ST's third-quarter figures were better than expected, and the Straits Times index put on 3.21 to 1720.32.

Australia's All Ordinaries index climbed 35.10 points to 3393.9, boosted by a 5% gain in News Corporation stock. This followed news that the group's British Sky Broadcasting group is writing off the value of its stake in Germany's KirchPayTV.

Growing convictions that Thailand's improving economy will force a favourable re-rating of its credit status boosted bank stocks, and took the SET index up 6.79 points to 353.56.

Malaysian stocks firmed hopes that institutional investors were returning, and the Kuala Lumpur Composite added 1.64 to 709.32. In Jakarta, the Composite index drifted down 1.77 to 431.4.

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