Asia: Most stocks up but Japan falls following stronger yen

Most Asian stocks continued to rise on Friday following the US lead and better-than-expected growth in several European countries.

The Eurozone gross domestic product (GDP) in the fourth quarter grew 0.3% from the previous three months, above consensus expectations of a 0.2% increase.

Shanghai's main index was up 0.95% ahead of the Chinese new year holiday. Analysts expect sales to increase during the holidays. The Chinese markets will be closed for a week from 18 February.

Hong Kong's Hang Seng also rose 1.07%. The Chinese stocks have been helped by the central bank's decision last week to cut its requirement ratio to help lift economic growth amid a slowdown.

The People's Bank of China trimmed the ratio requirement by 50 basis points to 19.5%.

Colin Cieszynski, chief analyst at CMC Markets, said the Chinese new year can be "another strong one for stocks markets" due to monetary easing from central banks around the world through interest rate cuts and asset purchase programmes.

"Perhaps most importantly for this analysis, the People’s Bank of China has joined this parade using its favourite tool, cutting bank reserve requirements," the analyst continued.

"This suggests that even though China’s GDP growth rate has been slowing, the government is not prepared to allow it to slow too much."

The year can also be helped by the crash in oil prices, as this has "historically been very positive for stock markets by putting more money directly back into the hands of consumers and businesses".

Australia's ASX rose significantly 2.33%, the highest level since May 2008, driven by Rio Tinto results and share buyback.
The mining giant on Thursday unveiled plans to invest $2bn (£1.30bn) in a share buyback, after the company’s annual profit beat estimates.

The stocks were also driven by news that a truce between Ukraine and Russia is set to begin in eastern Ukraine after 22:00 GMT on Saturday. The European Union has warned Russia that it faces additional sanctions if the deal is not respected.
Australia's Reserve Bank governor Glenn Stevens told MPs on Friday unemployment will keep growing "for a little while".

Speaking about the decision to cut interest rates, Glenn said: “We need more growth,” the governor said. “I had hoped for more signs of intentions to invest and pick up employment by now ... But we came to the conclusion that the economy needed more help.”

However, Japanese Nikkei 225 fell 0.37% due to a stronger yen against the dollar and profit taking. The currency rose to ¥118.83 against the dollar at 10:53 GMT.

Bank of Japan officials have grown increasingly concerned that the weaker yen could dampen consumer spending and sentiment, which would consequently make them cautious that further easing measures could prove counterproductive, according to the Wall Street Journal.

Nikkei also fell following Japan buying foreign stocks falling to ¥199.5bn in February from ¥675.2bn the month before. Additionally, foreign buying Japan stocks also decreased to ¥67.4bn this month from ¥70.2bn a month earlier.