China shares in the black but Japan flounders in Asia

It was a tale of two dragons in Asia on Tuesday, with China firing on all cylinders as the end-of-year spending spree continued, while Japan was relatively muted amid poor economic forecasts and some surprise forecast corporate losses.

On the mainland, Chinese markets rose as the looming end to the calendar year saw the anticipated buying spree by domestic insurers outweigh concern over Beijing's latest economic plans.

The Shanghai Composite Index closed up 0.3% to 3651.77. The onshore yuan also stabilised against the US dollar after Monday's increase in its loose peg following last week's steady decline in the controlled exchange rate.

Chinese shares were close to their highest level in almost a month and remained on track to close up 6% by the end of December.

The buying spree was driven primarily by insurers snapping up stocks in the construction and real estate sectors.

According to numbers crunched by Citic Securities, the Chinese construction sector saw stocks rise by 2.1% and real estate 1.4%.

"The aggressive share purchase by insurers reflects that there are limited alternative investment opportunities right now, and it has sparked some investor's interest in moderately priced blue chips", said Nanjing Securities analyst Zhou Xu.

Anbang Insurance Group increased its retail portfolio on Tuesday as well, biting off a larger chunk of department store groups Chang Chun Eurasia Group and Dashang Group. The two firms saw stocks rise by 10% and 0.7% respectively.

State-controlled financial news agency Securities Times said Anbang invested almost CNY 30bn (£3.11bn) in seven companies so far in December.

In Tokyo, the story was inflation and growth - or a lack thereof - as the Nikkei Stock Average fell 0.2%.

Japan's economic minister, Akira Amari, cited fresh government forecasts when he announced consumer price increases were expected to be 1.2% in 2016-17.

That fell in stark contrast to the Bank of Japan's goals with its controversial quantitative easing programme. The central bank had wanted to see inflation hit 2% by the second half of 2016-17.

Some analysts saw Amari's announcement as a signal from the National Diet that it would be comfortable if the Bank of Japan softened its tough stance on boosting consumer confidence and economic growth, which had both been flagging.

Toshiba Corporation continued its downward spiral after revealing expectations of a deep loss on Monday. It lost 12% on Tuesday, closing at JPY 223.5, adding to the 10% loss on Monday.

Mega-brewer Kirin Holdings also slumped, losing 5.8% to JPY 1669.0. It came after the multinational alcohol and soft drinks manufacturer said it expected a JPY 56bn net loss for the year ending this month, compared with earlier projections for a profit of JPY 58bn.

Kirin blamed goodwill impairments for its Brazilian unit for the mammoth turn in finances for the year.

Elsewhere in Asia, the Hang Seng closed down 0.1%, the Kospi was up 0.6%, and in Sydney the S&P/ASX 200 was up 0.2%. The markets showed broad resilience against the latest fall in oil prices, although Brent recovered slightly in Asia trade, closing up 0.5% to $36.52 per barrel.

Energy stocks in Australia were up 0.7% at close on Tuesday, though that didn't reassure investors who were still looking at a 12% loss for the month.

On the currency front, the yen was trading at 121.055 per US dollar at 1121 GMT. The Aussie was at 1.38234, and the New Zealand dollar was at 1.46692.

The Indonesian rupiah was up against the US dollar, having jumped almost 4% since last week. It's been speculated the Bank Sentral Republik was intervening to strengthen the developing nation's currency.

It stood at IDR 13,608.5 per US dollar and 20,247.0 per pound sterling.