Japan stocks jump on BOJ candidate speculation

AP News
Posted: Feb 24, 2013 11:21 PM
Japan stocks jump on BOJ candidate speculation

HONG KONG (AP) — Japanese stocks led Asian markets higher Monday, jumping on a report that the prime minister's pick for the next central bank governor will be a strong advocate of loose monetary policy aimed at reviving the moribund economy.

The benchmark Nikkei 225 gained 1.7 percent to 11,583.42 and the yen dropped against the dollar after Kyodo News, citing several unnamed government sources, reported that Prime Minister Shinzo Abe is preparing to nominate Haruhiko Kuroda as the next governor of the Bank of Japan.

Other Asian markets were more subdued. Hong Kong's Hang Seng was nearly unchanged at 22,783.71 and South Korea's Kospi was down 0.1 percent at 2,017.10.

Mainland China's Shanghai Composite Index climbed 0.3 percent to 2,321.12 and Australia's S&P ASX 200 rose 0.4 percent to 5,040.40. Benchmarks in Taiwan, Singapore and New Zealand also rose.

Kuroda, currently president of the Asian Development Bank, is known as an advocate of aggressive monetary easing to overcome chronic deflation favored by Abe to boost the country out of its economic slump, the Japanese news agency said.

"The market has become very excited over this news as he will be a market friendly choice," Chris Weston of IG Markets wrote in a commentary. Abe is expected to present his pick to parliament by the middle of the week.

The dollar strengthened to 94.05 Japanese yen from 93.42 in late trading Friday, as the Japanese currency hovers at its lowest in more than 2 ½ years.

Japan's government wants to boost inflation to pull the economy out of its two-decade stagnation, and investors believe that will result in a weaker yen, which would boost the country's exporters and also put upward pressure on prices. In other currency trading, the euro was flat at $1.318.

In energy markets, benchmark crude oil for April delivery was down 10 cents to $93.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 29 cents to $93.13 on Friday.