Stocks in Japan jumped the most in more than seven years on Wednesday, shaking off unease about slowing growth in China amid a tentative rebound in Chinese stocks.
In Japan, the Nikkei 225 index rocketed 1,343.43 points, or 7.7%, to 17,770.51, marking the benchmark’s biggest daily percentage gain since October 2008. In point terms, it was the biggest gain since January 1994.
In Hong Kong, the Hang Seng Index jumped 872.27 points, or 4.1%, to 22,131.31
A broad rally for shares and currencies comes after markets in the region fell Tuesday on weak Chinese trade data that had stoked concerns about a further slowdown in the world’s second-largest economy. Japanese stocks hit a seven-month low Tuesday.
But on Wednesday, investor sentiment toward China took a positive turn.
Japan shares swung back to positive territory for the year after falling to a year-to-date loss Tuesday. Investors were scooping up stocks in Japan, citing their cheaper valuations.
At Tuesday’s close, the Nikkei was down as much as 16% from its late June peak. Japanese companies were trading at 14.9 times their earnings, compared with 17.9 times in the U.S. and 15 times in Germany, according to data provider Quick.
The Japanese yen, a safe haven during market routs, weakened amid the Nikkei’s rally. The U.S. dollar rose to ¥120.25 from ¥119.81 late Tuesday in New York.
Among leaders in their sectors, electronics-parts maker Murata Manufacturing Co. was up 9.1%, medical and health care business Terumo Corp. gained 11.6% and auto-parts maker Denso Corp. was up 10%.
Nevertheless, many investors and analysts are bracing for further volatility. They remain anxious about the health of China and the global economy and are on alert ahead of next week’s meeting of the U.S. Federal Reserve, when the central bank could raise short-term interest rates for the first time in nearly a decade.
The Australian dollar strengthened by 0.3% to trade at $0.7043 U.S., its highest in days.
CHINA
The CSI 300 in Shanghai was boosted 65.28 points, or 2%, to 3,399.31
China’s finance ministry said Tuesday evening that the country would roll outa "more forceful" fiscal policy to stimulate economic growth, which it said faced downward pressure. The Ministry of Finance said in a statement that it would allocate more funds to support some infrastructure projects and implement tax cuts for small businesses. It also said it would accelerate the approval process for duty-free stores to boost construction.
Analysts said a late-day rally in China Tuesday lifted global shares, and created buying momentum that carried into Asia when markets opened Wednesday morning. U.S. stocks rallied overnight for their biggest one-day gain in two weeks, after Shanghai stocks surged Tuesday. Analysts speculated Shanghai’s 2.9% jump yesterday was led by government buying.
Data Tuesday showed China’s exports fell 5.5% in August from a year earlier in dollar terms, according to the General Administration of Customs, while imports dropped 13.8%. While analysts said the data weren’t surprising, the figures underscore how China’s economic slowdown is affecting trade, particularly for countries that focus their exports on Chinese demand.
