ASIA MARKETS: Japan Stocks Climb To Four-month High; Shanghai Falls

By Daniel Inman

Japanese and Australian stocks rose Thursday, with the Nikkei Stock Average closing at a four-month high, as investors took comfort in the U.S. Federal Reserve's stated commitment to low interest rates.

The Nikkei Average shrugged off gains by the yen, typically a headwind for stocks in Tokyo, and gained 1.6% at 15,361.16 -- the highest close since Jan. 29.

"The Fed didn't say much that the market hadn't already perceived; hence U.S. stocks' generally positive reaction overnight," said Nicholas Smith, equity strategist at CLSA. "More interesting is the fact of Japan shares' divergence from the dollar-yen market gyrations."

On Wall Street, the S&P 500 (SPX) closed at a record Wednesday after Fed Chairwoman Janet Yellen gave a relatively upbeat assessment of the U.S. economy. Speaking after the central bank's latest policy meeting, Yellen said that interest rates would stay low for a relatively long period.

The dollar (DXY) fell against major currencies, as investors who had expected the Fed to shift to an accelerated schedule for the increase in interest rates were disappointed. The dollar (USDJPY) weakened 0.2% against the yen on Wednesday, and declined further during Asian trade Thursday. It was last at Yen101.75, compared with Yen101.92 late Wednesday in New York.

In Tokyo, shares in Sharp Corp. (SHCAF) jumped 3.5% after the company announced that it had developed an LCD panel that can be cut into any shape, meaning it could be useful in a wide range of applications. Also in Japan, shares in Nippon Sheet Glass surged 16.9% after Nomura Securities upgraded the company to buy from neutral.

Also supporting regional sentiment in Asia were comments from Chinese Premier Li Keqiang, who said the Chinese economy would avoid a hard landing and hit the government's 7.5% growth target this year. This helped commodity-related stocks, especially in Australia, where strong gains in mining shares helped push the S&P/ASX 200 up 1.6% to 5,468.20.

Spot iron-ore prices rose 1% to $90.30, helping BHP Billiton (BHP) and Fortescue Metals Group (FSUMY) gain 3.3% and 5%, respectively.

In China, however, stocks fell sharply. Li's comments dashed hopes among investors that Beijing would implement more stimulus in the short term. Selling in small-cap stocks also weighed on the market, as liquidity was diverted to initial public offerings, with sharp falls on the startup board in Shenzhen.

"There are some concerns about insufficient liquidity following the new IPOs, but this likely a temporary fall," Capital Securities analyst Amy Lin said.

The Shanghai Composite lost 1.6% to 2,023.73, while Shenzhen's ChiNext fell 3.2% to 1,320.66.

Elsewhere in Asia, South Korea's Kospi was up 0.1% to 1,992.03, Hong Kong's Hang Seng Index was flat at 23,167.73, and Singapore's Straits Times Index was down 0.2% in late trade.

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