Exporters help Nikkei shrug off yen's woes

ASIAN investors returned from the Christmas break today to find themselves in the land of the falling yen, and facing the prospect of further depreciation in the Japanese currency as the bad economic news continued to pile up.

Japan's production fell to a 14-year low in November. It was down 1.8% from the previous month as major carmakers and electronics companies slashed their output.

Despite the prospects of competitive devaluations upsetting the regional economic balance, most markets managed modest gains in light trading. Tokyo traders were cheered by reports of good seasonal sales in the US, where retail giant Wal-Mart reported that demand had been better than expected over the past month.

This boosted shares in Japanese exporters of consumer goods and computer games, and the Nikkei 225 Average shrugged off the yen woes and closed up 265.04 points to 10,457.61, a hearty 2.6% gain. The slide in the yen to a three-year low of 131 to the dollar in early trading was seen as a further boost to the sales of games such as Sony's PlayStation 2 and similar products from other Japanese companies. Sony shares gained almost 3% and electronics groups whose chips power the hi-tech products rose in step.

The prospect of a real recovery in demand for computers and components also energised early trade in Taiwan and South Korea although profit-taking quickly wiped out most of the gains on the Taipei exchange. Semiconductor manufacturers were further boosted by reports that the price of basic 128 D-ram chips rose more than 7.5% the previous day. After an early rally of more than 2%, Taiwan's Weighted index slid back to show a 59.54-points fall to 5332.98.

South Korea's Kospi index hung on to a 1.5% rise, gaining 10.49 points to 664.36, as demand for banks and other financial houses was combined with the improving sentiment about electronics stocks.

Wall Street's firm return after the holiday buoyed Hong Kong stocks, with HSBC Holdings continuing to rebuild some strength after the hammering taken last week on concerns about its exposure to Argentine debt. The shares rose 75 cents to HK$91, providing most of the energy for a modest 34.38-points rise in the Hang Seng index to 11,244.16.

After Hong Kong property seekers spent their holidays displaying enthusiasm for the show flats of new developments, stocks in bluechip property companies moved sharply forward. There were gains of up to 1% in developers such as Cheung Kong and Henderson Land although very low turnover indicated that most investors were still enjoying a holiday. Australian stocks celebrated by reaching five-month highs with big industrial stocks and resource companies both in demand. Although turnover was subdued, the All Ordinaries index put on 26 to 3354.70.

Gold stocks were strong after AngloGold raised the stakes in the battle for Normandy Gold with a new bid of A$1.84 a share. Singapore electronics stocks took the Straits Times index up 20.94 points to 1607.91 in quiet trading.

In Malaysia, some blue-chip bargainhunting lifted the Kuala Lumpur Composite by 6.09 points to 685.39 while Thailand's SET index drifted down 0.14 to 304.30. The Jakarta Composite index was off just 0.44 at 377.53.

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.