Japan's Nikkei average climbed 2.6 percent on Friday, with investors reassured by a US government rescue for Bank of America Corp including a $20 billion injection and a guarantee for almost $100 billion of potential losses on toxic assets. A retreat in the yen helped lift exporters such as Honda Motor Co, while chip shares climbed after encouraging comments from Intel Corp.
A late wave of short-covering even lifted Hitachi Ltd out of the negative territory where it had been after sources said it would likely post an annual net loss of more than $1.1 billion.
"Basically investors have been shown that the US government will do what is needed," said Tomomi Yamashita, a fund manager at Shinkin Asset Management. The benchmark Nikkei gained 206.84 points to 8,230.15 after briefly climbing over 3 percent in the last hour of trade. It lost 6.9 percent on the week for its second consecutive week of losses, the first such stretch since mid-November.
On Thursday it briefly broke below 8,000 to its lowest point in more than a month. Investors wary after Thursday's tumble and a week of volatile trade had kept trade thin until the Bank of America news broke, helping them regain some confidence. Under an emergency plan announced by the US Treasury Department, the US Federal Reserve and Federal Deposit Insurance Corp, the Treasury will provide the largest US bank by assets with the $20 billion in fresh capital from a government bailout fund in exchange for preferred stock.
Chip equipment makers rose after Intel Corp said it expects margins to bounce back to healthy levels in the second half, setting off a relief rally since investors had feared the company would slash revenue expectations for the first quarter. Tokyo Electron, a maker of chip-making equipment, gained 8.5 percent to 3,120 yen and Sumco, a silicon-wafer maker surged 8.7 percent to 1,216 yen. Advantest Corp, a leading maker of chip-testing equipment, rose 4 percent to 1,262 yen.
The yen retreated against the dollar and euro, helping to boost exporters whose overseas profits are diminished when the yen is strong. Honda, whose exposure to Europe is especially large, surged 8 percent to 2,010 yen, while Toyota Motor Co, which also announced production cuts in North America, climbed 6 percent to 3,010 yen.
Among other major exporters, Sony Corp gained 4.8 percent to 2,075 yen and Canon Inc edged up 1.8 percent to 2,820 yen. Hitachi, the latest in a line of major Japanese firms to be beset with losses, edged up 0.6 percent to 346 yen. Trade was light, with 1.9 billion shares changing hands on the Tokyo exchange's first section compared with last week's daily average of 2.2 billion. Advancing shares outnumbered declining ones by nearly 6 to 1.