HONG KONG: Asian stocks mostly rose Tuesday as Chinese inflation met forecasts while Tokyo was given a lift after the government approved a bill to help TEPCO compensate people affected by its atomic crisis.
Beijing said consumer prices rose 5.5 percent year on year in May, their fastest pace in three years, despite leaders' efforts to calm inflation with a series of interest rate hikes and other monetary easing.
Soon after the data was released Shanghai was one percent higher and Hong Kong rebounded from earlier lows to sit 0.26 percent stronger in mid-morning as the figures had been expected by markets.
Tokyo ended the morning 0.16 percent higher, Seoul gained 1.32 percent and Taipei rose 1.07 percent. Sydney was flat.
The China inflation figure, which follows April's 5.3 percent, is the highest since July 2008 and will add pressure on the central bank to announce a fifth rate hike since October or further tighten banks' lending abilities.
Beijing's target for the whole year is four percent.
It also comes as other data suggest a slowdown in the world's number two economy, with manufacturing easing, new loans falling and auto sales also lower -- all adding to a sense that the country is heading for a hard landing.
However, analysts said that was unlikely as other data Tuesday showed fixed asset investment for January-May rising 25.8 percent on year, up from 25.4 percent in the first four months of the year.
Tokyo's Nikkei was given a boost by TEPCO, which soared 18.59 percent after the cabinet agreed a bill to help it pay out to the thousands affected by the crisis at the Fukushima Daiichi plant, which was crippled by the March 11 quake.
The bill, which is yet to be approved by parliament, will see the creation of a body to handle claims against TEPCO and will be funded by public money as well as contributions from power companies.
But analysts warned of uncertainty around the bill.
"Investors are buying back TEPCO shares believing that the government will pay a decent price for shares, but nothing concrete is known yet and it's too soon to make that assumption," Mitsuhige Akino, chief fund manager at Ichiyoshi Investment Management, told Dow Jones Newswires.
The euro held up despite news that Standard & Poor's had slashed its credit rating for Greece by three notches to CCC, saying there was a significantly higher probability of a default in the struggling eurozone member.
The agency said: "The downgrade reflects our view that there is a significantly higher likelihood of one or more defaults, as defined by our criteria relating to full and timely payment."
The euro fetched $1.4412 in Tokyo morning trading, flat from $1.4413 in New York late Monday. The European single currency sagged to 115.62 yen from 115.54 yen.
The dollar was rangebound at 80.20 yen, compared to 80.21 yen.
Oil was lower, with New York's main contract, light sweet crude for July delivery, down 24 cents to $97.06 a barrel, while Brent North Sea crude for July dipped 17 cents to $118.93.
Gold opened at $1,517.00-$1,518.00 an ounce in Hong Kong, down from Friday's day's close of $1,530.00-$1,531.00.
Copyright AFP (Agence France-Presse), 2011
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