Japan's Nikkei average rallied to a six-month closing high and the broader Topix index breached the 800 level on Wednesday after the Bank of Japan expanded its asset buying programme the previous day. The BoJ's surprise move, which included adding 10 trillion yen ($128 billion) to its asset purchase programme, pushed the yen to a 3-1/2-month low against the dollar, lifting the appeal of exporters' shares.
Toyota Motor Corp rose 4.7 percent and Honda Motor Co jumped 3.3 percent, while TDK Corp advanced 4.5 percent and Komatsu Ltd rose 5.3 percent. Financial shares outperformed the market, with Nomura Holdings Inc jumping 5.4 percent, Mitsubishi UFJ Financial Group up 4.1 percent and Sumitomo Mitsui Financial Group climbing 4 percent.
The benchmark Nikkei rallied 2.3 percent to 9,260.34, its highest close since last August and soaring above its 200-day moving average near 9,050 that had been seen as a resistance point. Market participants said the Nikkei was pushed higher by short-covering triggered after it rose above its 200-day average. Strategists said it would likely stay in the 9,200 range this week but continue to test higher if the yen kept softening against the dollar.
Trading volume spiked, with 2.9 billion shares changing hands on the main board, its heaviest daily volume since last August. The broader Topix advanced 2.1 percent to 802.96, its first rise above 800 in six months. Japan's sea transport subindex was the best performing sector and jumped 5.5 percent, with Nippon Yusen KK , Kawasaki Kisen KK, and Mitsui O.S.K. Lines Ltd surging 3.8-7.6 percent.
Bucking the overall trend was Elpida Memory Inc, which topped the main board as the biggest percentage loser, at one point falling by its daily limit of 80 yen, after it flagged concerns about its survival, citing stalled discussions with lenders on financial support ahead of debt repayment deadlines. It closed down 54 yen or 14.4 percent. Despite the Nikkei logging its biggest daily percentage gain since September 27 last year, some market players were less bullish on the outlook.
Technical indicators showed the Nikkei could be ripe for a correction as it was deep in "overbought" territory, with its 14-day relative strength index at 74.69. The benchmark Nikkei is up 9.5 percent so far this year as an improving outlook for the US economy and an injection of 489 billion euros ($642 billion) of three-year loans by the European Central Bank to boost liquidity counters disappointing corporate earnings in Japan.
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