ASIA MARKETS: Japan Stocks Jump, As Asia Extends Rally

By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) -- Japanese stocks shot higher Friday, as overnight gains on Wall Street and a weakened yen combined with upbeat industrial-production data to lift sentiment, and with other Asian markets mostly rising.

Japan's Nikkei Stock Average added 2% on top of Thursday's 3% rally, on course to record a gain of nearly 30% in the first half of 2013. The broader Topix jumped 2.3%, as the U.S. dollar (USDJPY) climbed back well above the Yen98-handle, with analysts eyeing further weakness.

A third straight day of gains for the Dow Jones Industrial Average (DJI) on Thursday amid fading fears the Federal Reserve would cut its bond purchases set the tone for a further advance in Asian markets Friday.

"Yen volatility has been hard to handle, but after a big washout, a clearer signal from the [U.S. Federal Reserve], and evidence of declining volatility, there is a [case] for fresh short positions," said Nomura strategist Jens Nordvig.

Data released Friday painted a mostly strong picture of economic conditions in Japan, providing a further lift. Industrial output for May saw a particularly robust gain, rising 2% to trounce expectations for a 0.2% improvement.

Elsewhere, South Korea's Kospi climbed 1% after jumping 2.9% the previous day, although Australia's S&P/ASX 200 slipped 0.1%.

Among Tokyo movers, Japan Tobacco Inc. (JAPAF) advanced 3.4%, steel maker JFE Holdings Inc. (5411.TO) climbed 3.7%, Sumitomo Mitsui Trust Holdings Inc. (SMFJY) added 4.7% and real-estate major Mitsui Fudosan Co. (8801.TO) gained 3.5% in a rally that touched most sectors.

Shares of Renesas Electronics Corp. (RNECY) jumped 5.5%, after the chip maker said late Thursday it would withdraw from most of its loss-making mobile operations, according to Kyodo News.

In Seoul, auto makers and financial stocks advanced, with Hyundai Motor Co. (HYMTF) gaining 2.5%, and Shinhan Financial Group Co. (SHG) rising 1.6%.

In Sydney, some banks continued their advance, although mining stocks broadly retreated.

Shares of Australia & New Zealand Banking Group (ANZBY) and Westpac Banking Corp. (WBK) were each up 0.8%, but BHP Billiton Ltd. (BHP) fell 1.2%, and gold miner Newcrest Mining Ltd. (NCMGY) dropped 2.6%.

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