Asian Stocks Advance, Led By Banks - BoJ May Step Up Efforts to Ease Credit Condition

The Asian stock markets rose for the fifth consecutive day, powered by the advance in financials, following the result of the U.S. bank ‘stress test.’ The Federal Reserve found 10 of the 19 largest banks would need to raise nearly $75B in capital, which was less than what many feared, and increased optimism for the U.S. banking system helped to subdue fears across the global markets.

[B][U]Asia[/U][/B][B][U] Session Key Developments[/U][/B]

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· [B]BoJ Meeting minutes show central bank may do more to ease credit conditions[/B]

· [B]Japan’s Finance Minister, Kaoru Yosano, expects dismal growth reading for first quarter[/B][B][/B]

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[B]Asian Stocks Advance, Led By Banks – BoJ May Step Up Efforts To Ease Credit Conditions[/B]

The Asian stock markets rose for the fifth consecutive day, powered by the advance in financials, following the result of the U.S. bank ‘stress test.’ The Federal Reserve found 10 of the 19 largest banks would need to raise nearly $75B in capital, which was less than what many feared, and increased optimism for the U.S. banking system helped to subdue fears across the global markets. In addition, energy shares also pushed higher as oil prices mark its biggest advance since March, and the rise in market sentiment suggests investors are expecting economic conditions to improve in the second-half of the year but nevertheless, as Japan’s Finance Minister Kaoru Yosano expects a large drop in1Q GDP, fundamental headwinds could weigh on investors as the downturn in the world economy deepens.

[B]NKY 225 9432.83[/B]

Japanese shares rose for a second day following the ‘Golden Week’ holiday, with the Nikkei 225 Stock Average rising 47.13 points, or 0.5% to close at 9432.83 in Tokyo. The rally was led by financials, with Mitsubishi UFJ Financial Group Inc., which invested $9 billion on Morgan Stanley, advancing 6.2% to extend yesterday’s 16% gain, while Yamada Denki Co., Japan’s largest electronics retailer, jumped 10% after forecasting higher profit for the year.

[B]HSI 17389.87[/B]

The Hong Kong stock market extends its longest winning streak as the Hang Seng Index gained 171.98 points, or 1.00% to close at 17389.87 after falling as much as 1.4% during the early trade. Hang Seng Bank Ltd. added 1.1% and Bank of China Hong Kong Holding Ltd. climbed 1.4% following the results of the U.S. Bank stress test, which was followed by encouraging comments from Hong Kong Monetary Authority Chairman, Joseph Yam, stating that the regions banking system is healthy. Meanwhile, PetroChina Co., Asia’s biggest crude oil producer, gained 4.1% after oil prices rose for a third day, while Aluminum Corp. of China jumped 9% after Goldman Sachs Group Inc. recommended buying the share.

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[B]ASX 200 3941.70[/B]

Australia’s stock market closed at 3941.70, with a slight gain of 3.00 points, or 0.08%. Banking shares accounted for much of the strength as National Australia Bank, Commonwealth Bank and Westpac rose 3.0%, 1.8% and 1.4%, respectively, however the gains were offset by a 1.1% drop in share of BHP Billiton after copper prices slipped from a three-week high in the New York trade.

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[B][U]Notable Asian Session Event Risk / Economic Releases[/U][/B]

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